Copper to Surge to Record.......Copper to Surge to Record by Year’s End on Chinese Demand, Barclays Says
ByYi Tian-Jun 8, 2011 12:46 PM ET
Copper prices will rise to a record$12,000 a metric ton by the end of the year as China’s importsrebound, said Nicholas Snowdon, an analyst at Barclays Capitalin London.
“The Chinese market is awakening from the destocking cyclethat lasted nine months,” Snowdon said today at a MetalBulletin conference in New York. “Their backyard inventorieshave been completely depleted. By July, we will begin to see asteady increase in imports.”
Copper has almost tripled since the end of 2008, reachingan all-time high of $10,190 on Feb. 15 in London as miningcompanies struggled to keep pace with rising consumption.Inventories monitored by the Shanghai Futures Exchange haveplunged 51 percent since mid-March. Stockpiles on the LondonMetal Exchange have jumped 37 percent from a 14-month low inDecember.
An increase in Chinese imports “should be enough to pushdown LME stocks on an aggressive basis,” Snowdon said. Globalinventories will fall to “all-time low later this year” asmine output is projected to be “more or less flat,” he said.
On the LME, copper prices have dropped 11 percent from therecord after manufacturing slowed in China, the world’s topconsumer of industrial metals, and the U.S.
“The macro data really offers a false signal in terms ofwhere we are headed in the next quarter,” Snowdon said.“Certainly, tighter credit is a very serious issue in China,and fabricators and manufacturers are operating in a very tepidhand-to-mouth fashion, but even that is enough to drive importshigher.”
Chinese imports in June may jump 25 percent from April asconsumption and investment demand rise, Jesse Jiang, the managerof copper research at state-owned Beijing Antaike InformationDevelopment Co., said yesterday in an interview.