UBS Changes Commodity Price Forecasts, Once Again

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By Terry Hughes

Changes in the broker’s estimated supply/demand balances have led UBS to take another look at its commodity price forecasts for 2006 and 2007.

As far as copper and nickel are concerned, the analysts expect markets to be tighter this year and next and as a result, they have raised their 2006 copper price forecasts by 10.1% to US306/lb, and 2007 by 22.6% to US325/lb, while nickel rises 9.2% in 2006 to US880c/lb and by 40.5% in 2007 to US1,075c/lb.

However, the news is not so good for alumina and aluminium, due to higher alumina production from China, and as a result 2006 alumina forecasts have been cut by 16.4% to US$498/t and 2007 by 25.8% to US$419/t. Aluminium forecasts fall 6.5% in 2006 to US115/lb and by 5.9% to US120c/lb in 2007.

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