Daily FNArena News - Commodities

Slowing global growth usually means weaker commodity prices but Barclays Capital suggests the current supply side issues across the commodity spectrum should support prices.

OPEC meets early in March to discuss the outlook for the oil market and Commonwealth Bank suggests the meeting is likely to find no change in output levels is required.

Supply side issues have pushed up the aluminium price but JP Morgan suggests such stronger prices will not be sustainable, the broker retaining its negative view on Alumina Ltd as a result.

Industry consultant TradeTech has left its weekly spot price indicator unchanged for the second week in a row.

While a number of LNG projects have now been proposed in Queensland Credit Suisse doesn’t think the market will tighten enough to lift prices to levels allowing all the proposals to proceed.

Barclays Capital has been bullish on aluminium for some time and with indications a potentially significant tightening in the market is possible the group reaffirms its view.

With China again leading the way steel industry consultant MEPS expects global steel output to rise by 5.7% in 2008.

Merrill Lynch has revised its gold price forecasts significantly higher and the broker is not alone in suggesting US$950 per ounce or higher is possible in 2008.

If history repeats itself spot uranium should soon be rising again.

With solid demand growth and supply concerns to keep the market tight NAB has revised up its forecast for average oil prices in 2008 to US85 per barrel from US$65 previously.