Metals sizzle as China's slowdown boosts monetary easing hopes

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Analysts expect no significant run up in metal prices

In sync with global metal movement, Sterlite and Hindalco rose sharply, recording maximum gains on the Nifty today. Bloomberg UTV’s George Cherian takes us through why these metal names are rallying.

The metal sector had a horrid 2011, but they have seen a turnaround some weeks ago. Copper gained after China’s slowest growth in 10 quarters fueled expectations of easing monetary policy in the world’s largest consumer of metals.  

Highlights
Aluminium: Price upmove unlikely to be sustained
Global production cut backs impact aluminum prices in December
Alcoa cut global aluminum smelting capacity by 12%
Analysts expect no significant run up in prices
Analysts feel weak demand does not support need for price rise
December LME aluminum prices ended at $2,020/ tonne versus $2,110/ tonne in November

So, what are the brokerages saying?

Morgan Stanley:
Copper most-favored base metal for 2012
Gold expected to climb over investment demand
Deficit to benefit aid Copper prices
Copper may be supported by restocking in China
Copper may avg $3.70/ pound ($8,157/MT), 3% less
Refined -metal deficit of 3lakh tons seen this year
Risks of European recession, slower growth for China
Bearish on lead, nickel, aluminum & zinc amid surplus
Average 2012 forecast for nickel cut 10% to $19,842/ ton, highest among base metals

Goldman Sachs:
Bullish on aluminum, zinc, copper & gold
Bearish on nickel