There's further encouraging news for the outlook for industrial metals in 2017. The World Bank in its just-released January 2017 Commodity Markets Outlook is forecasting strong gains for industrial commodities such as energy and metals during 2017, due to tightening supply and strengthening demand. The Bank has raised its metals price forecast to an increase of 11% from the 4% rise anticipated in its October outlook, on further tightening of supply and strong demand from China and advanced economies. The largest gains are expected in zinc (27%) and lead (18%) due to mine supply constraints brought on by permanent and discretionary closures. Double-digit gains are also expected for copper, nickel, and tin. Upside risks to prices include stronger global demand, slower ramp-up of new capacity, tighter environmental constraints, and policy action that limits supply. “Prices for most commodities appear to have bottomed out last year and are on track to climb in 2017,” said John Baffes, Senior Economist and lead author of the Commodity Markets Outlook. “However, changes in policies could alter this path.”
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