While prices were up 6% across metals on NAB’s base metals index in October, they fell in November on the United States economic concerns along with rising trends in copper, lead and zinc stockpiles.

The October price gains were also to do with the US currency, NAB said, and the base metals complex has remained in a steady oscillation when measured in Australian dollars.

“Within our short-term outlook, while US dollar metal prices are expected to stabilise in the fourth quarter [this year], prices in Australian dollars are weaker,” the bank said.

And the news is looking mixed next year as well, with record demand offset by growing production surpluses in all metals, the bank said.

However, the stockpiles are still at record lows and any supply disruptions such as refinery outages, labour disputes or infrastructure constraints could again pressure prices.

Nickel stocks, however, can breathe in relief if NAB’s forecasts are to be believed, as demand for the metal is expected to recover in coming months underpinned by China.

Chinese growth was lower in the last quarter – at 11.5% compared with 11.9% in the quarter before – but growth is expected to remain firm next year, driving steel consumption and nickel demand.

Still, nickel demand in 2008 may decline by around 3.6% year-on-year.

NAB said nickel will soften next year, but only moderately, and will average around $US32,000 per tonne, a year-on-year decline of around 15%.

The metal’s price certainly appeared to have stabilised after its crash from record highs of $50,000 per tonne earlier this year.

For aluminium, NAB forecast cost pressures would limit further price declines, while copper markets will continue to fluctuate on sub-prime concerns, and zinc consumption, while increasing, may not be good news for the zinc price as markets return to surplus.