Oct 12, 2012 (Dow Jones) -- Investment bank Credit Suisse Group AG (CS) Friday raised its forecasts for most base metals prices for both this year and next, raising expectations for flagship copper prices in 2012 by 2.3% to $7,927 a metric ton.
While China remains flush with copper with inventories at high levels, supply in the West is limited.
"With consumer and producer inventories also at historically low levels as a result of tightened credit conditions and caution towards weak demand prospects, metal availability in the West is quite limited," analysts at the bank said.
"It is therefore not surprising to see that physical premiums have risen in Europe and the U.S.," they added.
The bank also raised other base metal forecasts, including aluminum, for which the 2012 forecast price was raised by 0.3% to $2,031/ton, and by 0.6% to $2,175/ton in 2013.
Forecasts for lead and zinc were also raised for 2014, with expectations for zinc lifted 1.0% to $2,425/ton, and lead's price outlook for that year raised 5% to $2,625/ton.
Price forecasts were lowered for nickel, however, by 0.9% to $17,791/ton, from $17,953/ton, in 2012.
"[Nickel's] recent price increase is likely to...prompt some producers to increase volumes and resume production, and we have in fact heard the first reports of refineries resuming production in recent weeks," noted analysts.
"Moving forward, we do not expect nickel ore availability from Indonesia to decline further, as the government has expressed a goal to keep export volumes in line with those of 2010 and 2011...Nonetheless, we believe that the increased difficulty and cost of sourcing ore from Indonesia will continue to see companies focus on supply from the Philippines and alternate sources," they added.