Analysts Jim Lennon and Adam Rowley at Macquarie Bank's offices in London have raised the investment bank's 2008 price forecasts for aluminum, copper, lead and zinc.

Copper prices will average $3.50/lb, compared with $3.315 forecast for this year, because "the raw material end of the copper market remains extremely tight," Macquarie e-mailed to the Bloomberg News Service in mid-August, "The next two years are likely to be a tough time for smelters, which will struggle to find sufficient feed to fill their operations."

Copper for immediate delivery on the London Metal Exchange has risen 20% this year as disruptions at mines and smelters reduced supply. Producers including Rio Tinto Group, the world's third-largest mining company, have reported lower copper output this year because of ore containing less metal and adverse weather. Production of copper will outpace consumption by 82,000 tons in 2008, following a surplus of 113,000 tons this year, the analysts forecast.

Meanwhile, aluminum will average $1.25/lb this year and $1.30 in 2008, say the Macquarie analysts who admit being bullish on this metal's price because exports from China, the largest producer, have declined after the government removed incentives.

Lead prices will average $1/lb next year, compared with the 65¢ previously forecast. Zinc will rise to an average of $1.40, from an earlier estimate of $1.30. The bank analysts says they have maintained their nickel price forecast of $13.25/lb for next year but have cut this year's estimate to $17.02, down 6.2% from their earlier forecast.