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Morgan Stanley’s #Commodities Outlook – Business Insider


MORGAN STANLEY: This Is What The The World’s 14 Most Important Commodities Will Do

mauritius sugar cane
Sugar cane plantation in Mauritius

With the growing global population increasingly demanding goods, many financial advisors have advised clients to invest in commodities. Morgan Stanley’s commodities team led by Hussein Allidina favors soybeans, corn, and wheat as poor weather conditions slam supplies.
They also like precious metals, particularly gold and silver, as loose monetary policy sends investors seeking something with more stable value.  In fact, Morgan Stanley recently called the Federal Reserve’s latest action a game changer for the yellow metal.
What follows are Morgan Stanley’s opinions and price targets for 14 major commodities.


Brent oil continues to be affected by geopolitical tensions

Projected 2012 average: $110 /bbl
2013 price: $115 /bbl

Middle East unrest and and easy central bank monetary policies continue to support oil prices, though softer fundamentals heading into 4Q12 should weaken year-end crude prices. Risks are skewed to the upside for 2013.

Source: Morgan Stanley

Natural gas supplies will tighten by the end of the year, eventually sending prices higher

Natural gas supplies will tighten by the end of the year, eventually sending prices higher
Natural gas compressor station

Projected 2012 average: $2.74 /mmBtu
2013 price: $4.00 /mmBtu

Oversupply continues to weigh, but slowing gas-directed drilling may begin to help tighten balances by late 2012.
Source: Morgan Stanley

 

Aluminum prices will stay at low levels due to oversupply and too much production

Aluminum prices will stay at low levels due to oversupply and too much production
Sean Gallup/Getty Images
Projected 2012 average: $2,100 /MT
2013 price: $2,200 /MT
Very high global inventory and excessive production capacity will lead to up to two years of headwinds.
Source: Morgan Stanley

Copper prices will lead the industrial metals due to supply concerns

Projected 2012 average: $7,900 /MT
2013 price: $8,300 /MT
Supply difficulties will keep copper prices elevated — the global inventory pipeline remains soft.
Source: Morgan Stanley

Nickel supplies remain high, but price risk is to the upside

Nickel supplies remain high, but price risk is to the upside
Projected 2012 average: $17,800 /MT
2013 price: $18,300 /MT 
Supply risks from any new project delays and the impact of developments in Indonesia will keep the market primed for a price rally.
Source: Morgan Stanley

Zinc will continue to suffer from oversupply for several more quarters

Projected 2012 average: $2,000 /MT
2013 price: $2,100 /MT
Record-high inventories at the current rates of demand weigh on prices, but production is slowing. 
Source: Morgan Stanley

Gold is the best commodity to own right now

Projected 2012 average: $1,677 /oz
2013 price: $1,816 /oz
Interest rates, risk aversion and strong physical market fundamentals will serve as tailwinds.
Source: Morgan Stanley

Silver prices will be supported by the same forces fueling gold’s rally

Projected 2012 average: $32 /oz
2013 price: $35 /oz

Negative real interest rates will limit downside price risk.
Source: Morgan Stanley

Platinum lacks the safe-haven status of gold or silver

Projected 2012 average: $1,554 /oz
2013 price: $1,715 /oz
Platinum lacks safe haven status and has limited investment demand. Slowing global GDP and lower discretionary spending remain headwinds.
Source: Morgan Stanley

Commodity Red Flag…


Commodity Red Flag…

The MasterMetals Blog

>MasterMetals: Precious Metals Charts in Euros, USD and CAD


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Gold, Silver, Platinum and Palladium Charts in Euros

Prices in Euros per ounce and per kilo in 8 and 24 hour intervals

 
Gold
Price per ounce
8 hour
24 hour

Price per kilo
8 hour
24 hour

Source: KitcoCharts,/Kitco.com

 

The MasterMetals Blog

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