Base metals: are they losing their shine?
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The boom in base metals will be bolstered by a combination of tight supply, dollar weakness and Chinese demand in 2008, says Veronica Brown on Reuters. But for the first time since the boom started in 2001, the longer-term outlook for base metals may be looking a little murky. The prospect of an extended US recession is spoiling the party. US demand for zinc is already falling sharply, with analysts expecting a surplus of zinc to develop in 2008. The tide is also turning for nickel, according to ABN Ambro, with a modest oversupply persisting over the next few years, despite relentless Asian demand for its use in stainless steel production. “The days when the metal prices rose in harmony are now over,” says Javier Blas in the FT.
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