Shining copper price to dim in second half
mineweb.com
Standard Chartered Bank expects the price of copper to drop to $6,200/t in the second quarter of this year, $5,200 in the third and $4,750 in the last quarter.
Author: Tessa Kruger
Posted: Thursday , 12 Apr 2007
Johannesburg -
The rallying copper price is expected to dip in the second half of the year when supply problems ease and demand from the US housing market drops off.
Helen Henton, head of commodity research at Standard Chartered Bank, said today the copper price was currently supported by Chinese stockpile demand, a weaker dollar and the ongoing strike at Chuquicamata copper mine in Chile.
LME copper stockpiles were currently low and any threats or pressure on near-term supply would drive the price upwards.
The price was initially driven by the Chinese replenishing stockpiles in the first quarter of the year after inventories were depleted in the third and fourth quarter of last year.
"But once China has replenished its copper stockpiles the market will become much easier.
"We expect the price to drop to $6200/t in the second quarter of this year, $5200 in the third and $4750 in the last quarter of this year."
Demand from the US housing market, a major consumer of copper, is expected to slide later in the year as growth continues to slow, but copper demand from Chile is expected to pick up.
Henton described movements in the copper price as a "swing" on the back of inventory levels, but said underlying demand for copper remained intact.
The bank expects the copper price to average at $4250/t in 2008.
Copper fell from a seven-month high on speculation that imports into China may slow this afternoon, said Bloomberg.
The spot copper price - copper for delivery in three months - fell $70 or 0.9% to $7,760/t at 3.45pm London time.
The price rose 1.8% earlier to $7,970/t after workers at Codelco, the world's biggest producer of the metal, blocked the entrance to the company's largest mine following a labour dispute. |
