Metals such as tin and copper could see their prices double in coming years, Ebullio Capital Management said on Monday, as supply worries and buoyant demand push the record-hitting metals higher.
Copper, used in power and construction, could hit $11,500 a tonne this year after touching a record high of $10,190 in February, Lars Steffensen, managing partner at Ebullio told the Reuters Global Mining and Steel summit.
He listed tin, copper, lead, zinc, nickel and aluminum, which faces high stocks and prospective oversupply, in his order of preference.
"I don't think (aluminum) is going to double from here, whereas I think there is a very good chance that tin, copper, lead, zinc could double from here," he said.
"(The timeframe is) over the next two, three, four, five years. It's going to be orderly because there are so many people passive long in the market so they will be selling on the way out. There will be a lot of profit-taking."
A dearth of supply, buoyant demand, low stocks and surging production costs are expected to help copper prices capture new records this year, a Reuters survey showed on Friday.
"I think we're going to have another stab at $10,000 if we break it. I think we could see $11,000, $11,500 this year," he said. "I think there is a floor around $9,000 in the market."
He forecast copper trading in a range of $8,000 to $12,000 for the next 12 to 24 months. "If I had to bet my bottom dollar, I would say we would see 12,000 before we see 8,000."
Steffensen said he had a positive outlook for metals.
"I probably wouldn't sell any of them. If I was going to sell any, I would sell in relation to another metal," he said.
"You have supply constraints, a good demand story, not just China but everywhere in the world. Having said that you also have today mining companies that have massive money to invest in new production so I don't think it's going to be as sure and as deficit prone as most people think across the sector." (Reuters)
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