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The molten copper is poured.

PETER ANDREWS/Reuters

Globe editors have posted this research report with permission of Dundee Capital Markets. This should not be construed as an endorsement of the report's recommendations. For more on The Globe's disclaimers please read here. The following is excerpted from the report:

We are updating our commodity price forecast by marking-to-market our short-term forecast, adjusting medium term prices and leaving our long-term view unchanged at this time. The most meaningful changes were for hard coking coal prices, copper, zinc and molybdenum in 2015. The recent strength of the U.S. dollar is the key driver for the adjustment to our base metals prices following the summer slowdown in the global economy.

In an environment where the outlook for the global economy and base metal prices are wobbling, valuations are under pressure. Valuation is cheap but in-line with bottom of cycle. We believe mining stocks will see valuation multiples expand and the sector will outperform the S&P TSX index in 2015.

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From the bottom in July 2013, base metal prices are generally flat or up, led by nickel and zinc.

Total LME Inventories rolled over in late 2013, but rose in August. With copper and zinc inventories down 63 per cent and 23 per cent each over the last 12 months, total base metals inventories (ex-aluminum) are back down to 2010 levels.

Nickel inventories are still high (up 54 per cent over the last 12 months), but are expected to peak in 2015.

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