LONDON Lead will be the metal to watch for investors next year, as a lack of investment and a pickup in lead-acid battery demand could push prices higher, Standard Bank commodity strategist Melinda Moore said during LME Week in London last week.
Leads toxicity has meant that no one has been investing in it to create more production capacity, but an anticipated pick-up in the battery sector could lend support to lead prices in the future, Moore said.
"No one invested in it and so suddenly lead is going along very happily. It is the one to watch and to invest in if you can cope with the idea of investing in lead," she said.
Standard Bank forecast lead prices to rise to $2,139 per tonne in 2013, up 3.7 percent year on year, and increase 18 percent in 2014 to $2,525.
Zinc is another metal to watch over the next couple of years due in part to a supply depletion, technical difficulties in mines and low prices, Moore said.
Although Standard Banks forecast shows zinc prices dropping in 2013 and 2014 to $1,901 per tonne and $1,870, respectively, they are projected to rise to $2,000 per tonne in 2015, up 7 percent year on year.
The surplus of nickel will contribute to its negative performance, Moore said, but the price drop has led to more of the metal being used in stainless steel, whereas previously high prices had made its use less economical, she added.
Standard Bank estimated nickel prices to fall 14.2 percent year on year in 2014 to $15,032 per tonne.
Moore projected copper prices will likely remain "muted" in the coming year due to strong growth in China and an increase in supply coming through.
"There are mine disruptions but overall, supply is growing relative to demand. If demand growth doesnt rise as quickly, we will start to see a surplus emerging," she said.
Standard Bank expected copper prices to drop 6.8 percent year on year in 2014 to $7,419 per tonne.
Aluminum prices are likely to continue to suffer against the high levels of stock that outweigh its demand, she said.
The increased use of aluminum in cars and its use as a copper substitute in some electrical products could give some lift to the market, but there is less aluminum being used in construction, she added.
"Ultimately, we have just got too much stock relative to demand," Moore said.
Standard Bank predicted aluminum prices to fall 7.9 percent year on year in 2014 to $1,861 per tonne.
A version of this article was first published in AMM sister publication Metal Bulletin.