BNP Paribas Favors Copper, Tin Versus Nickel In 2012

BNP Paribas says it is maintaining a negative bias toward nickel relative to other base metals. The bank looks for nickel to move into a structural surplus this year after the market was essentially balanced in 2011. While world demand increased by 7% last year, growth slowed markedly after the first quarter, BNP says. The bank looks for demand to grow 6.5% in 2012. Meanwhile, even though the bank has trimmed its forecast for world finished nickel production in 2012, it still looks for year-on-year growth of 7.5%. “This year’s surplus may be modest, but only because we think it likely that the nickel price will remain low enough to restrain production growth,” BNP says. “However, we are not overly negative about nickel’s price prospects from current levels. And more than most metals, nickel has a habit of surprising to the upside. But we retain a negative bias towards nickel relative to other base metals.” For 2012, the bank says, it favors copper and tin versus nickel.