VM forecasts strong zinc, nickel prices for 2004

Votorantim Metais (VM), the metals arm of Brazilian industrial group Votorantim, forecasts that metals prices will remain strong for 2004, Joao Bosco, VM's president, was quoted as saying in business daily Valor Economico. Prices jumped in July 2003 and are expected to remain high due to strong Asian demand, especially China's continued growth and signs of recovery in Japan and the US, he said. The weak dollar trading against the euro has also encouraged investors, funds and speculators to protect themselves by investing in commodities. The price of zinc, produced by VM companies Paraibuna and CMM, is currently over US$1100/t from lows of US$700/t back in 2001, the executive said. The forecast is a deficit of 116,000t of zinc concentrate this year and global stocks to fall to five weeks from 8.4 weeks by 2006. VM imports a small percentage of concentrate for its smelters. Nickel prices have been even more spectacular. Prices of the metal, produced by VM's Niquel Tocantins, closed 2003 at US$16,500/t from bottom of the barrel prices of US$4500/t in 2001. "Demand [for nickel] will be 103% of industry's capacity this year," said Bosco.