Commodity price forecasts — Analysts remain optimistic for 2017

The commodity market is off to a bullish start in 2017, with a majority of the S&P Capital IQ consensus price forecasts as of April 17 showing higher figures than the corresponding 2016 price averages. The same trend was evident in last month's forecasts.

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With the exception of gold, precious metals are forecast to climb in price over the next few years. The 2017-2019 price forecasts for silver, platinum, rhodium and palladium are all higher than the corresponding price averages for 2016.

Gold, however, is an outlier in the precious metals group, with a 2017 forecast price of US$1,245/oz, compared with the yellow metal's average price last year of US$1,250/oz. The price is expected to recover in 2018 and 2019, driven by reduced production and the accumulation of gold stocks by Asian governments, especially by the authorities in China and Vietnam.

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With the recent supply shocks in the copper market, an upward forecast price trend is foreseen for 2017, 2018 and 2019 at US$2.55/lb, US$2.66/lb and US$2.82/lb, respectively. The 43-day strike at Escondida, cessation of production at Grasberg and reduced production at Cerro Verde are major factors in the supply shortage fear for copper, even if the disruptions end up being temporary.

Iron ore and cobalt share a similar sentiment, with higher forecast prices for 2017 and projected declines in 2018 and 2019. A restocking cycle among Chinese steel mills largely supported the iron ore price last year, but as the restocking phase is coming to an end, the iron ore price has already come under downward pressure. Meanwhile, a rise in cobalt demand is one of the contributors to the metal's higher 2017 forecast price.

Base metals tin, lead and zinc have higher 2017 forecast prices at US$9.35/lb, US$1.01/lb and US$1.23/lb, respectively, showing a significant jump from 2016 actual average prices. Similarly, prices are expected to surge this year for aluminum, molybdenum, uranium and nickel, with further increases in 2018 and 2019.

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Commodity price forecasts — Analysts remain optimistic for 2017

Gain vital insights to commodity pricesand minimize risk.

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Commodity price forecasts
— Analysts remain optimistic for 2017

Gain vital insights to commodity prices
and minimize risk.