This is the same basic message, from the same ScotiaBank person but in a different newspaper. It seems they are all going to pick up the story and repeat it. First off, I hope she is right and secondly that people will believe she is right and start investing now.

Read more: http://www.timescolonist.com/business/fp/Year+Dragon+will+year+copper/5905529/story.html#ixzz1hPTrtWrI

OTTAWA — Oil and copper will be the star commodities of 2012 as China enters the Year of the Dragon, slaying inflationary pressures and engineering a soft landing for its economy.

So says Scotiabank commodities specialist Patricia Mohr, who says in her 2012 outlook that China has shifted to a “pro-growth”stance after having previously tightened credit conditions to contain rising costs.

China has already cut reserve requirements at banks and permitted more bank lending, and further easing is expected soon, as prices in the country’s overheated property market have begun to fall along with food and consumer prices.

“While China’s economy could slow further through early 2012, we expect a rebound to get underway around the second quarter — bolstering global growth and commodity prices,” Ms. Mohr said in her December Commodity Price Index report, which tracks 32 of Canada’s key commodity exports.

China’s 12th five-year plan, running from 2011 to 2015, will encourage private investment in railways, utilities, and the financial and energy sectors, she said.

“Priority will be placed on the construction of affordable, social housing, with 10 million units already started in 2011 and another 10 million planned for 2012 (a total of 36 million units from 2011-15).

“Construction of these apartments should more than offset an expected sharp downturn in private-sector starts in 2012, a source of recent concern in financial markets.”

While Ms. Mohr says this will help wood producers, it will not be until late in 2012 that benchmark lumber prices begin to rise, along with a more sustained rally in the depressed U.S. housing market, which began to show signs of recovery late in 2011.

The biggest beneficiaries will be copper and oil, which will outperform the rest of the commodity complex, Ms. Mohr said.

Copper’s many industrial uses will conspire with a supply deficit that began late in 2011 and extend into 2012, despite a six per cent increase in global mine supply.

“World mine output has increased only 1.1 per cent per annum from 2007-11 in the face of rapid demand growth in China and emerging Asia, lifting prices onto a higher plane,” said Ms. Mohr.

That will restore prices for copper from the $3.39 a pound it fell to late in 2011 back to $4 a pound — averaging $3.90 over the year — once China’s fabrication demand strengthens in the spring.

U.S. crude oil, meanwhile, will average $95 to US$100 a barrel in 2012.

Ms. Mohr bases this forecast on oil cartel OPEC recently setting production levels at 30 million barrels a day, which is only slightly higher that projected demand.

However, Ms. Mohr cautions, “any embargo of Iranian crude would drive prices dramatically higher."

Iran is the second-largest OPEC producer, with output of 3.55 million barrels a day and exports of 2.6 mb/d; offsetting this crude would test the excess capability of the major OPEC Gulf producers (2.7 mb/d).

The possibility occurs on mounting concern Iran is seeking to obtain nuclear weapon and that Western powers will tighten sanctions against the country.