Metals Commodities Outlook Positive Despite Forecasts of Rough Going in 2009

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In an analysis published Monday, BMO Capital Markets Global Commodity Strategist, Bart Melek, said, "The vast majority of the clients, producers and associates we met at the various events were resigned to accept that it will be very rough going for metals for the better part of 2009 as the global recession runs its course..."

Participants at the recent London Metal Exchange Metals Seminar 2008 in London expect metals to be under pressure, but are optimistic about their long-term future owing to strong developing world demand and the potential for tight supply/ demand conditions.

In an analysis published Monday, BMO Capital Markets Global Commodity Strategist, Bart Melek, said, "The vast majority of the clients, producers and associates we met at the various events were resigned to accept that it will be very rough going for metals for the better part of 2009 as the global recession runs its course..."

"Most participants have even accepted the inevitability of a slower China next year-the primary source of the commodity boom," Melek noted. Despite the current gloomy scenario, LME conference attendees have a continued expectation that China will support metal demand in 2009 and over the long term, "a view shared by BMO," Melek stressed. "Expectations of eventual large-scale production cuts were also seen as supportive of prices in the longer-term."

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