Copper may average $8,475 a metric ton in 2012 as demand slows, with the weakest trading in the first half of the year, Thomson Reuters GFMS said.
The metal used in pipes and wires will average $8,305 a ton in the first half of the year because of slower economic growth in China and Europe’s sovereign-debt crisis, the researcher said in a report today. Copper for delivery in three months averaged $8,328.57 a ton in the first quarter and yesterday fell to $7,885.25 a ton, the lowest price since Jan. 13. It’s up 5 percent this year.
“There is a continued negative impact on sentiment and consumption from the ongoing euro-zone crisis,” Sanjay Saraf, research director for base metals at GFMS, said in the report. “Recent data and reports from China indicate a cooling economy and subdued demand conditions.”
Copper premiums in China over the price of the metal on exchanges fell to $50 to $90 a ton in the first quarter from $120 to $150 a ton in the final three months of 2011 on slowing economic growth, GFMS said. Copper stockpiles monitored by the Shanghai Futures Exchange rose to 227,276 tons in March, the highest since 2003. Stockpiles in bonded warehouses more than tripled to 650,000 tons from November, Barclays Capital estimates.
Premiums in Europe and the U.S. have rebounded in the last few months because of improved demand, particularly in the U.S., and dwindling stockpiles, GFMS said. Inventories of copper in warehouses monitored by the LME have dropped as much as 32 percent this year, data from the bourse show.
Copper may “re-test” $9,000 a ton later this year on higher demand and government steps to boost growth, according to the report.
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