Note at the bottom of the story "BMO's base metals equity team suggests the most sensitive nickel names are Perth's Minara Resources (ASX: MRE"
BMO reckons nickel and copper prices will rally and firm up this year BMO Commodity Strategist Bart Melek says the new eurozone/IMF Greek debt plan and firming fundamentals are lending support to nickel, copper and the miners.
Author: Dorothy Kosich Posted: Monday , 29 Mar 2010
RENO, NV -
BMO Capital Markets Global Commodity Strategist Bart Melek expects nickel and copper prices to firm over the next several months as real physical supply/demand fundamentals improve.
In a note published Sunday, Melek advised, "Given the need to restock consumer inventories, the strengthening global recovery and higher stainless smelting rates should continue to rally both nickel and copper into 2010."
"The likely shift into deficit conditions should also continue to drive LME inventories lower, likely at a faster rate than in the last several months," he said. "The market is already reacting to this as prices tend to move 30-90 days ahead of actual inventory declines."
Melek noted that LME nickel inventories have dropped 6.3% to a three-month low, "albeit from high levels." BMO anticipates a fairly deep 36kt deficit this year partly due to delays at the Goro Nickel project and a strike at the Vale Inco operations.
Meanwhile copper LME stocks have declined 6.9% and "demand is projected to firm materially," up 7% this year. Melek forecasts that the copper market is expected to be in deficit until 2011.
BMO's base metals equity team suggests the most sensitive nickel names are Perth's Minara Resources (ASX: MRE) and Finland's Talvivaara Mining (LSE: TALV), while the most sensitive copper names are Vancouver-based Taseko Mines (TSX: TKO) and Brisbane-based copper and gold miner PanAust (ASX: PNA).
MRE Price at posting:
89.0¢ Sentiment: Buy Disclosure: Held
