Analyst sees metals shortage following recession in 1989

Nesbitt, which foresees a recession bringing the current economic cycle to an end late this year, says a projected shortfall of base metals in the 1990s presents another opportunity for long-term investment growth.

Analyst Julian Baldry says zinc and nickel, in particular, should do well during the next boom in metals prices, the price run-up to be tied to the next business cycle.

Nesbitt, in a summer metals report, writes that supply and demand graphs for each metal indicate higher metal demand in successive economic cycles.

“Higher demand in the next cycle and lack of nickel and zinc capacity increases suggest these metals will face supply shortages sooner than u sual in the next cycle,” write the firm’s researchers.

“Metal prices, earnings of producers and share prices could be mid or perhaps even early cycle performers in the next boom.”

Nesbitt recommends Inco Ltd. and Cominco Ltd. as possible buying opportunities in an economic downturn.

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