Goldman Sachs on Thursday revised its price forecasts higher for 2017 for all base metals amid expectations for stronger demand and higher coal prices. Demand for base metals from China was likely to grow in 2017, the influential Wall Street investment bank said in a note. "Over the next 3-12 months, we expect Chinese demand growth to remain solid, albeit slowing moderately in our base case," the bank said.
However, it said there were major downside risks to Chinese demand growth for metals in 2018 and beyond as the country shifts away from its "metals-intensive, investment-heavy old economy-driven growth model." "For this reason, high prices in the coming year - such as what we forecast for zinc and nickel - should in our view be viewed as a one-off opportunity for producers to hedge their production over the medium to long term," the bank added.
Goldman said relatively solid mine and refined supply growth, and expectations of further supply growth led to copper's underperformance compared to other commodities this year, which was likely to continue in 2017. The bank forecast copper to average $4,693 per tonne in 2016 from $4,565 earlier, and $4,275/tonne in 2017 as against it previous forecast of $4,083. However, it lowered its nickel price outlook to $9,653/tonne (vs $9,739 earlier) for 2016, while raising it to $11,250/tonne from $10,500 for 2017.
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