Analysis: Copper prices could rise as supplies start to diminish in 2011

on Tuesday, April 5, 2011

Analysis: Copper prices could rise as supplies start to diminish in 2011  Copper futures had surged over the past few years as demand from emerging economies - especially that of China - outpaced production. Diminished global; stockpiles, however, have pushed copper futures lower during the first three months of 2011, giving the commodity its worst quarter in 10 years.

Nonetheless, analysts expect copper supplies to fall over the course of the year as Chinese demand is forecast to climb by over 6 percent; demand is also projected to increase for copper, used primarily in construction and the assembly of electronics, in the U.S. and the euro zone. Last year, copper futures surged 30 percent higher as global supplies were depleted by demand.

China, the world's biggest user of copper, is mostly responsible for the dip in copper prices this year as the country has worked through its stockpiles and boosted scrap imports. "Both of those trends I think will have an endpoint within the next couple of months," said Charlie Sartain, who runs the copper business at Xstrata Plc.

U.S. demand is expected to climb six percent this year as the economy improves, but mine supply could lag behind as disruptions slow productivity. The Collahuasi mine in northern Chile, for example, was adversely affected by heavy rainfall during the first three months of 2011, which hindered production. The effects of the supply disruptions could soon be felt in the price of copper futures, analysts assert.

0 comments:

Post a Comment

Keep in Touch and Subscribe:

Keep up to date with your Procurement & Strategic Sourcing News.

Procurement News RSS Strategic SourcerorRSS Feed
Follow GetSavings on TwitterTwitter/GetSavings
Friend Source One on FacebookSource One on Facebook