June 6 (Bloomberg) -- Platinum will average 25 percent more than previously forecast in 2009 because of power shortages in South Africa, where more than three quarters of the metal is produced, Merrill Lynch & Co. said.

Platinum will average $2,500 an ounce next year and in 2010, analysts Jason Fairclough and Daniel Fairclough said in a report dated yesterday. Prices have risen 34 percent this year and averaged $1,936. Merrill also raised its 2008 copper forecast.

Eskom Holdings Ltd., which generates 95 percent of South Africa's electricity, has curbed supply to mines and smelters in the country since January. The shortage will continue until 2012, the company has said.

``After a period of zero production because of power outages, mines are now producing again but have to contend with reduced power availability,'' the analysts said in the report. ``Expect more shocks.''

Copper will average $3.60 a pound ($7,937 a metric ton) this year, 5 percent higher than earlier forecast, Merrill said. The metal will average $3.79 a pound next year, 9.8 percent more than the previous estimate.

``Looking past current softness due to weak Chinese demand, copper continues to look tight through 2009,'' the analysts said.

Nickel will average $11.65 a pound this year, a 20 percent drop from the previous forecast. Zinc will average $1.04 a pound this year, 3 percent lower than previously forecast.

The bank also raised its forecasts for coking coal, used in steelmaking, and thermal coal, used in power plants. Coking coal will trade at $320 a ton next year, 78 percent more than the previous estimate. Thermal coal will trade at $135 a ton, 23 percent more than previously forecast, Merrill said.

``As long as high oil prices persist, we believe that more people will begin to contemplate coal's value on a contained energy basis versus other fossil fuel alternatives,'' the analysts wrote in the report. ``On this basis, it is not difficult to get to $200 a ton thermal coal prices.''

To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net

Last Updated: June 6, 2008 06:23 EDT