Industry Reports

Westpac First Half 2003 Commodity Report

This report recognises Australian minerals producers are having to cope with subdued prices and a stronger Australian dollar against the US dollar, but suggests some recovery in metals prices in the second half of 2003.

However, there is no certainty on the timing and extent of any rise, the report says.

Base metal prices other than nickel will remain weak until industrial production recovers, with general metal prices largely supported by strong economic growth in China, boosting domestic metals demand.

However, China has excess capacity in aluminium.

Thermal coal prices are under pressure from more suppliers and weaker demand, but tight supply is supporting improved iron ore prices.

Coking coal prices have weakened but will remain strong, as quality supplies are limited, the report says.

Oil prices will weaken as the situation in the Middle East runs its course, but remain volatile, with some risk premium persisting in the near-term price.

Gold prices will be supported by US dollar weakness but fundamentals still indicate that real gold prices will decline in the longer term.