While many factors are pointing in the right direction for basic materials companies in 2010, longer-term headwinds include capacity expansions, which could cause oversupply, and demand shifts due to environmental concerns. And of course, Chinese demand saved many commodities in 2009, so a favorable 2010 depends on continued strength from that country.
Building Materials
North American building materials companies' 2010 will be defined by stimulus spending, the shape of the residential construction recovery, the magnitude of the downturn in nonresidential construction, and the outcome of the next federal highway bill.
On the London Metal Exchange, copper MCU3 for
three-months delivery rallied to $7,290 a tonne, its highest
since late September 2008, and was at $7,254 a tonne by 1507
GMT, versus Thursday's evening evaluation at $7,070. * Analysts said worries about a 42 percent rise in LME's
copper stockpiles and a 485 percent surge in Shanghai
inventories of the red metal have weighed on copper this year
despite prices more than doubling since the end of 2008. * Investors, however, are betting on a demand recovery by
next year that could help diminish LME's copper inventories,
currently at 485,925 tonnes -- the highest since April. (Reporting by Barani Krishnan in New York and Nick
Trevethan in Singapore; Editing by David Gregorio 30TH Dec,2009 |
