Copper generates heat as supply crunch looms
Copper prices which reached at a five-week high in the global markets, continued to surge with analysts anticipating breaching of the March-high of $8,800 per tonne in the near-term.
By ET Bureau |
MUMBAI: Copper prices which reached at a five-week high in the global markets, continued to surge with analysts anticipating breaching of the March-high of $8,800 per tonne in the near-term. Base metals traded within a tight range in Asia, and traders were waiting for cues from the US economic and a decision on rates by the Federal Reserve which could boost the appeal of the metal. On the London Metal Exchange (LME) copper traded to $8,350 on June 24 after skirting $8,490, its highest since May 19. Copper has risen 26% this year on supply disruptions and with the dollar sliding 7% against the euro. According to traders, limited stocks and threats to supply in Africa and Latin America could lift prices above the all-time high.
According to Debjyoti Chatterjee of MAPE Admisi Commodity Research, copper had bounced back after correcting since March on speculative buying and strong crude prices. ���Considering external market factors and a regime of galloping inflation in economies including the US, Euro zone, China and India, copper looks extremely vulnerable at these levels,��� he said. On the global supply-demand front, the gap was much lower this year than last, but China, one of the largest importers had seen reduced imports in May due to the earthquake. The reduced level of imports has sent consumers scurrying to secure metal from Shanghai Exchange warehouses. Stocks have halved since March this year, reports said.
As a result prices have come under pressure. Surendra Mardia, president of Bombay Metal Exchange said: ���Market is very volatile. Here, prices are up by over Rs 12 a kg in the last 10 days,��� he added.He pointed out further, that
international benchmark copper could touch $9,000-level in next two weeks. ���A clear signal would be available in the next few days,��� he said. Earlier, markets had struggled to climb in the absence of physical buying, particularly from China. In May, China copper imports were down 19% at 94,196 tonne from a year ago and 26% lower than April imports.That, along with dwindling mine supplies owing to higher wage demand by labourers in South America had kept prices in check.On supplies, the World Bureau of Metal Statistics stated that copper output trailed demand by 42,000 tonne from January through April, narrowing a deficit of 135,800 tonne in the same period a year earlier. LME Copper stocks are currently hovering around 124,000 tonne.
According to Debjyoti Chatterjee of MAPE Admisi Commodity Research, copper had bounced back after correcting since March on speculative buying and strong crude prices. ���Considering external market factors and a regime of galloping inflation in economies including the US, Euro zone, China and India, copper looks extremely vulnerable at these levels,��� he said. On the global supply-demand front, the gap was much lower this year than last, but China, one of the largest importers had seen reduced imports in May due to the earthquake. The reduced level of imports has sent consumers scurrying to secure metal from Shanghai Exchange warehouses. Stocks have halved since March this year, reports said.
As a result prices have come under pressure. Surendra Mardia, president of Bombay Metal Exchange said: ���Market is very volatile. Here, prices are up by over Rs 12 a kg in the last 10 days,��� he added.He pointed out further, that
international benchmark copper could touch $9,000-level in next two weeks. ���A clear signal would be available in the next few days,��� he said. Earlier, markets had struggled to climb in the absence of physical buying, particularly from China. In May, China copper imports were down 19% at 94,196 tonne from a year ago and 26% lower than April imports.That, along with dwindling mine supplies owing to higher wage demand by labourers in South America had kept prices in check.On supplies, the World Bureau of Metal Statistics stated that copper output trailed demand by 42,000 tonne from January through April, narrowing a deficit of 135,800 tonne in the same period a year earlier. LME Copper stocks are currently hovering around 124,000 tonne.
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