Deutsche Bank hikes base metals price forecasts

Germany's Deutsche Bank has revised up its forecasts for long-term base metals prices because of rising production costs and lower quality ore. The investment bank said in a research note late last week its long-term price forecast for copper is now $3,307 a tonne, up 29.3 percent from a previous number and aluminium at $2,161 a tonne, up 19.5 percent. "These upgrades, in part, reflect the increase in our long-term oil price forecast, which was raised from $45 a barrel to $60 a barrel two months ago," Deutsche said. "In addition, metal producers are also having to contend with rising costs attributable to declining ore grades and rising labour costs." Strong worldwide commodity demand is also conspiring to sustain the high level of commodity prices over the long term, the bank said. The long-term forecast for nickel was raised by 32.5 percent to $14,550 a tonne and zinc by 23.8 percent to $1,808 a tonne.