Back on top! Raw Materials Group’s metal price forecasts 2011

Published 2011-03-18 00:00:00

RMG forecasts another strong year in metal price increases at a rate similar to 2010, after which prices are expect to increase at a slower rate in 2012 and be maintained at 2012 levels throughout 2013. From 2013 to 2015 metal prices are expected to soften due to the arrival of new supply although the RMG index is not expected to drop below current levels, implying continued high metal prices for the long term.

On-going industrialisation and urbanisation of emerging markets will ensure a high demand regime for at least the forthcoming decade. Increased infrastructure spend, such as increased power grid investment in China and a budding material intensive consumer consumption, as typically the expanding auto-sector in both China and India supports this assumption, thus spreading demand across all base metals and all emerging economies.

Raw Materials Group (RMG) regularly compiles forecasts for base and precious metals. Combining these forecasts RMG constructs its RMG metal price index. The latest review is depicted graphically below with the tabled forecasts for 2011 and 2012.

Last year, 2010 the RMG index surpassed the 2007’s peak. The general recovery from the global financial crisis was expected but what has been surprising is the speed and strength of the recovery. RMG expect the trend to continue with a price level in 2011 similar 2010 with a slowing though still increasing price level in 2012. The rationale behind this is the pause in mine development, both for new mines and existing mine expansions, and hence supply increases from 2008 to 2010.

Tags: Metal prices, RMG