Bearish Capital Economics ranks top 2013 base metals forecaster

Commodity Markets | March 25

LONDON, Jan 21 (Reuters) - Forecasts on 2013 base metals

prices by a consultancy focussed on economics, with a more

bearish view of prices than the consensus, beat predictions from

banks with teams of commodity analysts.

The estimates by Ross Strachan at Capital Economics at the

start of last year were well below the bullish figures of most

other analysts and ended up being much more accurate.

UBS (Xetra: UB0BL6 - news) , Credit Suisse (NYSE: CS - news) , Barclays (Berlin: BCY.BE - news)

and JRG Wealth Management also got top places for their more

downbeat expectations of metals prices last year, when stronger

supply and lacklustre global growth weighed on markets.

Strachan has since left the London-based research firm,

which mainly focuses on economic sectors, to join Thomson

Reuters GFMS, where he is looking at precious metals.

He was the top forecaster in zinc and nickel, based on

Reuters polling contributions, and came second and third in

copper and aluminium, respectively.

No other forecaster got more than two of the top-three

rankings among the six major base metals.

Strachan was the only forecaster to correctly predict the

scope of the 14.4 percent loss in the average price of nickel,

the worst performing base metal last year which was hit by a

glut of overproduction and surpluses.

In January, he forecast that the London Metal Exchange (LME)

cash price for nickel would average $15,250 per tonne

during the year, less than 2 percent off the actual result of


The second-best forecast was much higher at $17,000 a tonne,

and the median was $18,000.


The next-best forecasters were Swiss banks UBS and Credit

Suisse, each getting one top place and one second ranking.

UBS produced the best among 30 forecasts on the slide in

benchmark metal copper with a forecast of $7,496 a tonne, only

2.4 percent away from the actual outcome of $7,322 and well

below the more bullish median consensus of $8,119.

Most analysts had forecast that the copper market would flip

into surplus last year after a deficit in 2012, but still

thought the average price would manage to rise 2 percent instead

of shedding 8 percent.

In the latest poll, UBS is sticking with a bearish view for

copper, expecting a drop of 6.7 percent to $6,834 a tonne this

year and a further 6.5 percent to $6,393 in 2015.

"We continue to forecast the medium-term formation of a

refined copper surplus, weighing on the metal's price outlook,"

UBS said in a note.

Barclays (LSE: BARC.L - news) analyst Gayle Berry came tops in aluminium with her

forecast of $1,988 a tonne, which was 7.8 percent higher than

the outcome of $1,845 but still well below the median consensus

of $2,105. Berry's forecast was the only one that was under


Berry expects more downside in aluminium with a average

price of $1,850 this year, close to the median consensus of


Credit Suisse was top forecaster in tin, which was the

strongest performing metal last year with a 5.7 percent gain in

the average price.

The bank forecast tin would average $22,125 per tonne last

year, only 0.8 percent off the outcome of $22,297 and compared

with the median consensus of $23,800.

Credit Suisse expects more gains for tin this year for a 6

percent rise to $23,625 a tonne.

India's JRG Wealth Management was the best forecaster in

lead with its estimate of $2,170, 1.4 percent away from the

outcome of $2,141.

Below is a table of the top three forecasts in each of the

six main base metals. Where two institutions are listed for one

ranking, both had the same forecast.

Copper Aluminium Zinc Lead Nickel Tin


Average 7322 1845 1909 2141 15000 22297

First UBS Barclays Capital JRG Capital Credit

Economics Wealth Economics Suisse

7496 1988 1975 2170 15250 22125

Second Capital Credit RBC UBS Goldman CPM

Economics Suisse Macquarie Group

7600 2013 1984 2094 17000 22040

Third BNP Capital JRG Deutsche National Citi

Paribas Economics Wealth Australia

Goldman Bank

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