* Long-term lead price forecast up 40 percent
* Aluminium prices under pressure from overcapacity
* Tin production lacks diversity
By Pratima Desai
LONDON, Oct 15 (Reuters) - Long-term price forecasts for industrial metals lead and copper have been raised sharply due to potentially stronger demand over coming years meeting scarce supplies, a Reuters survey showed.
Forecasts for long-term aluminium prices have in contrast been cut because of expectations of overcapacity, especially in China. Nickel and zinc forecasts in the survey carried out over the last three weeks were little changed.
The average of 12 forecasts for the long-term lead price was $1,677 a tonne, up 40 percent from the previous survey published in Oct. 2008, mainly because of expectations Chinese output capacity will be slashed due to poisoning fears.
Global lead consumption, mostly for batteries, is estimated at above 8 million tonnes a year. Lead was trading at around $2,200 a tonne on the London Metal Exchange on Thursday.
"The planets are lining up for lead ... Chinese pollution problems promise to raise costs globally," said David Thurtell, analyst at Citigroup.
Long-term prices are used by analysts to evaluate future share-price prospects and potential revenues of mining companies such as BHP Billiton and Rio Tinto.
For a graphic of the results from the survey of long-term base metal price forecasts click on http://graphics.thomsonreuters.com/109/CMD_LTFRP1009.gif
The average of 15 forecasts for long-term -- 10 years plus -- copper prices was $4,850 a tonne, up 10 percent from Oct. 2008. The three-month future or benchmark price on Thursday was $6,165 a tonne.
"Signs are that over the next few years shortages will develop in some metals. Copper stands out," Thurtell said.
"The commodities cycle isn't broken, it just had a puncture. The global financial crisis meant new projects were put on hold and that has resulted in supply destruction."
Analysts expect demand for copper used in power and construction to be heavily reliant on China, the world's largest consumer, said to account for more than 30 percent of annual global consumption estimated at about 16 million tonnes.
LACK OF DIVERSITY
Long-term price forecasts are also used to assess costs for consumers such as auto makers, which use about 30 percent of global aluminium production estimated at around 35 million tonnes this year.
The long-term price forecast for aluminium was cut 10 percent to $2,474 a tonne. Three-month aluminium was trading at $1,890 a tonne on Thursday.
"Aluminium is oversupplied and it's relatively easy to expand capacity or build new capacity," said Robin Bhar, analyst at Calyon. "It could take several year to whittle those down."
Stocks of aluminium at above 4.5 million tonnes in London Metal Exchange warehouses are a whisper away from record highs set earlier this year. But that number only includes visible stocks and analysts say the real number could be a lot higher.
Tin stocks too at above 26,000 tonnes are at their highest since March 2003. But the long-term price forecast is 16 percent higher at $14,500 a tonne, not far from three-month future trading at $14,325.
"We think tin's upward price bias has much to do with the fact that it lacks diversity in its production base," MF Global said in a research note.
"As production out of China -- now no longer a substantial exporter -- continues to fall due to declining ore grades, the tin market is becoming overly dependent on Indonesian, and to a slightly lesser extent, Peruvian supply, with all the production and/or political problems that this entails."
Global annual tin usage is estimated at 360,000 tonnes a year, the bulk of which is produced by China and Indonesia.
The long-term price forecast for steel ingredients nickel and zinc were little changed at $16,535 and $1,800 a tonne.
Three-month nickel was at $18,300 a tonne and zinc at $2,005.
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For blogs on the event, please see: http://blogs.reuters.com/commodity-corner/2009/10/09/live-from-london-metal-exchange-week-2009/
For table of long-term, 2009 and 2010 average price forecasts click on
For story on 2009, 2010 average price forecasts click on
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For latest survey of economic indicators for G7 countries click on
(Reporting by Pratima Desai and Veronica Brown; graphics by Scott Barber; editing by Sue Thomas)