Rising output could pressure base metals prices: HSBC Securities

摘要

New York--The global economic cycle has passed its turning point, as industrial output reached a peak in 2004 and is set to decline. Since industrial demand for base metals is a function of the world's economic health, demand is expected to decline along with economic growth, said Victor Flores, senior mining analyst with HSBC Securities. Fund activity has played a major role in the buoyant metals prices in recent years, but "slowing growth and rising output" could "pressure base metal prices," Flores said Jun 2 at the New York Society of Security Analysts' 5th Annual Metals & Mining Industry Conference in New York. Flores forecasts a decline in global GDP growth to 3.6 percent in 2005 from 4.6 percent in 2004 and to 3.2 percent in 2006. "US leading indicators point to a weak H2 2005 and 2006; the Eurozone is threatened with renewed industrial recession; Japanese growth is vulnerable to slowdowns in China and the US, and Chinese authorities need to tighten policies more to re-balance its [China's] growth," said Flores.