Apparantly Morgan Stanley has lowered its 2012 prices for the majority of metals and minerals, citing “uninspiring” prospects and the case for a stronger dollar
The revisions follow a belief that the risk of a full-blown global recession increased in the second half of 2011, the firm said in a note. “Our bear-case scenario for 2012 and 2013 in particular reflects the downside risks in base metals and bulk commodities from this major growth risk.”
“In general, we are negative on the metals with sizable surpluses such as aluminum, nickel, lead and zinc,” the report said. However, the firm said it remained positive on copper, which it said was “supported by low inventories, high levels of supply disruption and a restocking cycle in China.”
Despite remaining a “favored base metal,” copper could average $3.70 a pound in 2012, down from $4.01 a pound in 2011 as well as an earlier 2012 forecast of $3.80 a pound. A strong U.S. dollar and weak euro are negative for commodities in general, the house said.