Readers of this report will appreciate that ours is one of the very few reports in the world that has maintained an optimistic outlook for base metals for quite some time now, especially for copper. It was indeed a brave thing to do as US equity markets were plunging and gold prices were rallying, both indicating further economic distress, not to mention the bearish sentiment in the market. Our contention has been that any further erosion in base metals prices would seriously impair the supply side of the equation and also a moderately weakening US dollar may support the base metals prices. US dollar is expected to weaken in the next 3 months and that may further support the base metals prices in the medium term. However, one has to keep in mind that the underlying theme of US economic recovery by end of this year, signs of which will only start appearing in the middle of third quarter, has to remain intact.
NSTL
