Best Commodities for 2013, Morgan Stanley
Gold, silver, soybeans and corn will remain among the most attractive commodities for investors in the upcoming year
According to Morgan Stanley, the platinum group of precious metals will continue to benefit from a positive outlook in 2013, though there are certain concerns toward base metals such as copper.
In its 2013 outlook for commodities release, the financial firm announced that structural and supply limited commodities will be preferred among investors. Demand and supply were affected by the rise in prices through the years. This drove a number of investors to plead for an end of this never-ending commodity “super cycle”. Yet, these desires are irrational.
The continuance of the cycle and the flexibility of the demand-supply relation obviously range within the complex, although cyclical character of the commodities.
There are a lot of opportunities and investors should choose more carefully. Several factors will cause effect over the price action – demand flexibility, supply basis, peculiar risks and the insecurity in the global demand. If investors seriously take in consideration the above listed factors, than investing in commodities such as gold and silver, soy and corn seem a good choice.
The forecast expressed tepid certainty in crude oil, though the outlook for the second half of the next year seems better.
As we step into 2013, the yellow metal will continue to be one of the most favorite commodity investments with its fundamental exposure. The US easy monetary policy and the unrestricted buying of bonds of the European Central Bank are the main drivers for the further weakening in the greenback currency and the higher prices of the yellow metal in respect.
But there are also other drivers which support the ongoing trend in prices. The tensions in the Middle East region are still a threat, along with low nominal interest rates and mine production problems. According to the forecast, the price would be also supported by central banks purchasing and a possible rise in demand from India as the market gets used to the price.
Trough the next year, silver is expected to have good exposure with even better performance than gold, according to the forecast.
The group of platinum metals is likely to be promoted by limitation on supply level. Yet the demand-supply relation outlook proves better for palladium performance, rather than platinum.
It is expected that prices will benefit as deficit markets are set to continue in the New Year. Platinum metals outlook is a lot more positive driven by supply concerns in South Africa which removed the excess from the largest platinum group markets. The supply is limited due to problems in Africa, while the demand from the industry sector is stable.
Analysts are rather cautious commenting on the outlook of base metals driven by the economic growth expectations during the first half of 2013. Another driver would be the complicated connection with the international macroeconomic tendencies.
Surplus in supply in most of the markets trading base metals, especially with copper is one of the factors which boost the negative outlook. On the other side, analysts predict a rise in industrial demand during the second half of 2013.
The forecast foresees an average copper price of 8,600 per metric ton. The global stockpile of base metal is low, yet the supply is likely to rebound in 2013. The outlook for copper demanded in metal-using sector is positive, with great expectations from China.
The forecast for other base metals predicts a nickel price of $18,300, and zinc average $2,200 a ton. According to Morgan Stanley, the aluminum price will rally around $2,300 per ton, driven by the excess supply and overproducing market.
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