A survey of 26 analysts at banks and other organisation published by Reuters on 22 July produced a “consensus” average view that the annual average LME cash price would decline from US $20,658/tonne in 2008 to $18,468/tonne next year. The forecast compares with a first half average this year of $20,174 and a peak official close on 15 May of $25,500. The range of forecasts for 2008 was wide, from $18,000 to $22,350/tonne. The range in 2009 was even wider, between $7,716 and $25,500/tonne.
The mean of the forecasts for this year is still 42% up on the actual average for 2007. “We continue to view prices as having a potential upside bias in the near term, with market fundamentals remaining supportive,” said Gayle Berry, an analyst at Barclays Capital. “This is highlighted by the lack of normalisation of supply from Indonesia, down-trending LME stocks and further entrenchment of China’s position as a net tin importer.” However analysts with a more bearish view on prices assume that reactivations of mine capacity will ease supply concerns.
