Best Metals Forecaster Smirk Sees China Recovering: Commodities
Industrial metals will rally through the middle of next year as the economy strengthens in China, the biggest user of everything from aluminum to zinc, according to the most accurate price forecaster tracked by Bloomberg.
Justin Smirk of Westpac Banking Corp. (WBC) in Sydney beat as many as 25 others in predicting metals for two consecutive quarters on a rolling two-year basis, data compiled by Bloomberg Rankings show. He expects copper, nickel and zinc to gain through June and forecasts a 22 percent rise in aluminum.
China will accelerate through the end of September after slowing for seven consecutive quarters, the median of economists’ estimates compiled by Bloomberg show. That’s boosting prospects for demand as policy makers from Europe to the U.S. to Japan pledge more action to bolster growth. Smirk, 47, says he focuses primarily on economic cycles, central banks and financial markets to make his commodity predictions.
“We do see this point in time as perhaps the worst for the growth cycle,” said Smirk, who has worked at Australia’s second-largest lender by assets since 1999. “Commodity prices should be moving stronger through this year and into next.”
Smirk’s average margin of error in the most recent rolling eight-quarter period was 7.4 percent, Bloomberg Rankings data show. That compares with 11.7 percent for his nearest rival, Bart Melek of TD Securities Inc. in Toronto. Prices are often volatile, with nickel surging as much as 24 percent after plunging 31 percent this year.
Aluminum will advance to $2,380 a metric ton by June because of China’s recovery and central-bank actions in Europe and the U.S., Smirk said. That will boost energy prices, which account for about 40 percent of smelters’ production costs. Nickel, used in stainless steel, will climb 15 percent to $18,500 a ton, as copper rallies as much as 12 percent to $8,500 a ton and zinc gains 8.6 percent to $2,100 a ton, he says....MORE