Nickel, copper prices may fall 45% by 2008: Access

July 26 | Updated: Jul 27 2006, 05:30am hrs
Copper, nickel and other commodities prices may decline as much as 45% over the next two years as miners expand capacity, Australias Access Economics said, citing a poll of brokerages and research companies.

Prices of copper, nickel, aluminium likely peaked in the three months ended June, and will decline through to December 2008, Canberra-based Access Economics said in an e-mailed statement. Though the firm didnt reveal which analysts it polled.

Most of the forecasters think the peak of this price cycle is already with us, and that prices will fall substantially, for copper, nickel, zinc and other metals, Access Economics said.

The research firm added, Then again, the commodity forecasters have called the price peak before now, and theyve been consistently wrong.

Prices of copper, zinc and oil have surged to records this year as concern over supply disruptions increases even as demand led by China continues to grow. Merrill Lynch & Co, UBS AG and other brokerages have been revising their forecasts this year, as prices continue to beat expectations.

Copper, used to make wires and pipes, may fall by almost 45% over the next two years, after soaring 44% in the June quarter, Access said.

Nickel, used to coat steel, could fall by 45%. Prices of nickel had gained 33% in the June quarter due to falling inventories and continued demand from China.

The analysts revised their long-term prices 7% higher, Access Economics said. This comes on top of a 6% upwards revision in the March quarter survey.

Access Economics survey last July said commodity prices could fall by as much as 49% between June 2005 and June 2007.

The Australian firm had polled 11 analysts including from Citigroup Inc and Deutsche Bank AG for that survey.

Bloomberg