Goldman: Base Metals Could Face Near-Term Pressure; Long-Term Prospects Better

Goldman Sachs cautions that European debt problems and slowing economic growth could keep base metals under pressure in the near term, but analysts are more upbeat for the longer term. 
An expectation for positive global economic growth led by emerging-market economies, disappointing supply growth for key metals and the likelihood of rising oil prices on tightening balances suggest higher metals prices in 2012, Goldman says. 
“Further, we maintain that a potentially powerful upside catalyst still lies largely ahead in China should policymakers more convincingly shift to an easier stance and/or should lower prices increasingly entice Chinese buyers back into the market,” Goldman says. 
“Reported declining Chinese inflationary pressure increases the likelihood of these supportive shifts. Thus, we continue to believe that current prices present value to consumers, especially for aluminum, nickel and zinc, for which prices remain at multiple-year lows.”