Global Metals Market Outlook Still Positive In 2010-CRU Group

May 29, 2010 (Dow Jones) -- SHANGHAI The outlook for the global metals market remains positive in 2010, said a senior manager at metals-consultancy CRU Group on Saturday.

Paul Robinson, group manager of non-ferrous metals, told an industry conference that there are several reasons for this outlook. Among them are price gains accumulated last year holding on into 2010, investors returning to the commodities market, re-emerging commodities consumption mainly from emerging markets such as China and India, and a stop of stock build after massive increases of metals inventories last year, he said.

In 2009, metals consumption in developing countries, such as China, Brazil and India, accounted for 59% of total global metals consumption; in 2014, it will rise to 64%, said Robinson.

"Strong consumption growth and stock builds stop will lend support to prices [this year]," he added.

Robinson also said copper prices will average between $7,000 and $7,200 a metric ton this year, while average prices of both aluminum and zinc will be $2,000 to $2,200/ton in 2010.

Aluminum will see a strong global growth of 14% in consumption, or 40 million tons, Robinson said, but it will face some risk in containing its price appreciation.

Robinson estimated about 5 million to 6 million tons of aluminum are held in stocks for the purpose of financing. If the market saw certain releases of those stocks, it would lead to a sudden supply surplus, according to Robinson.

Any increase in the premium in the physical market in the U.S. and Europe will likely be the first indicator of those aluminum releases, he said.