Copper Forecast for 2005 Raised by Macquarie on Low Stockpiles
2005-05-09 08:17 (New York)
By Chanyaporn Chanjaroen
May 9 (Bloomberg) -- Macquarie Bank Ltd. raised its 2005
price forecasts for copper as ``chronically tight'' stockpiles of
the metal used in electric wires and brass will keep supply lower
than demand this year.
Copper will average $1.413 a pound this year, up 8.6
percent on year, Jim Lennon and Adam Rowley, analysts at
Macquarie Bank in London, said in a report today. That's 2.4
percent higher than the bank's previous forecast of $1.38.
The ``critical'' issue in copper is whether supply is
``actually overtaking demand,'' Rowley and Lennon said.
Total copper stocks on the London Metal Exchange, the
Shanghai Futures Exchange and the Comex division of the New York
Mercantile Exchange have fallen almost 17 percent in the year to
May 6, at 103,414 tons, and are at the lowest since 1987, the
analysts said. The stockpiles equal less than two days of global
consumption, estimated to reach 17.4 million tons this year by
the International Copper Study Group.
Copper demand may stay high longer if China's State Reserve
Bureau, the official stockpiling body, decides to replenish their
stockpiles, the analysts said. They estimate the Chinese agency
needs to seek about 300,000 tons of copper that it released in
the market last year.
The State Reserve Bureau doesn't publish its actions.
Copper for delivery in three months was up 1.3 percent at
$3,215 a ton ($1.4613 per pound) at 1 p.m. London time. Prices
have risen 2 percent this year.
The analysts lowered their forecast for 2005 average
aluminum prices by 2.4 percent to 87.8 cents a pound, after
speculators sold the metal on concern slowing demand will prevent
the aluminum market from becoming ``seriously tight,'' they said.
The latest forecast shows aluminum prices 12.7 percent
higher than a year ago, the analysts said.
Aluminum for delivery in three months has fallen 8.9 percent
this year and was quoted at $1,784 a ton at 1 p.m. in London.
--Editor: A. Brown |
