In the latest survey of LME metals price forecasts published by Reuters yesterday the average of 29 analysts’ forecasts of the tin price in 2008 was US$15,387/tonne, 6% higher than last year’s actual average of $14,542/tonne, but lower than recent levels. Forecasts ranged from a low of $11,023/tonne to the highest one of $18,000. Tin price forecasts for 2009 ranged from a very low $6,614/tonne to a high of $16,535/tonne, averaging $12,906/tonne.
Across the LME metals, 44 companies participated in the survey, which Reuters carries out twice a year. For all the metals, the average of the analysts’ forecasts was fairly close to current forward prices, with differences between individual projections mainly linked to alternative views on the global economic outlook. One of the more bullish analysts, Gayle Berry at Barclays Capital gave the following overview of the situation: “Providing global economic growth assumptions remain relatively firm, we view 2008 as another year of strong consumption prospects for base metals, with emerging markets plugging OECD weakness. Looking forward, rising production costs, low inventory levels and relatively sparse market balances mean long-term metal price prospects are still good.” Other banks were more concerned about the fall-out from a likely recession in the USA.
Individual analyst views on tin quoted by Reuters were moderately bullish. Stephen Briggs of SGCIB (forecast 2008 price $14,750) said: "Two things have happened in recent years: there has been a demand shock because of a move to lead free solders and then you had the shock of Indonesia putting curbs on its domestic industry. In a sense that hasn’t really been fully resolved, so everything in tin revolves around what the Indonesian government does. I think it is going to stay pretty tight so the downside is probably quite limited for tin." Meanwhile Metal Bulletin Research (2008 forecast $16,256) said: "We still expect a fundamentally tight year for the tin market in 2008, which should keep prices well supported and see them facing upward pressure at times."
