|
|
Opalesque Exclusive: Tiberius sees mixed outlook for industrial metals this year, market surplus to be slightly stable
From Komfie Manalo, Opalesque Asia: Switzerland-based commodity funds house Tiberius Asset Management AG released a report entitled ‘Capital Markets Outlook 2009’ last week. The report forecasts 2009 will be a “transition year” for the industrial metal sector, and added surplus in supply and deviation in prices will not be significant.
Demand for metal
The growth in global industrial production dictates demand for industrial metals. The economic slowdown, particularly in the 4th quarter of 2008 caused demand for industrial metal to decline. After driving the LMEX Index of the London Metal Exchange (LME) to a high of 350% growth from 2002-2007, the sector expanded to just 2% in 2008.
According to the Tiberius forecast, 2009 is poised to register a negative demand growth for the sector, unless major emerging companies, such as Brazil, India and China show some economic recovery to reverse the scenario.
The global recession has also revealed significant market surpluses which caused exchange inventories of industrial metals to increase. The credit crisis also added to the drastic build-up of exchange inventories.
During boom years, many industrial companies try to hold large internal inventories hoping demand will rise. Also, investors intentionally hoard physical invent...................... To view our full article Click here
|
|
RSS
