Copper Prices are widely followed in the commodity sector. Copper is an essential industrial metal used worldwide. Copper prices are followed in financial markets around the globe and the metal is growing in popularity. Copper is widely used in construction and because of its electrical properties is found in wires and circuit boards. Copper is mined in open mines around the world, with Chile and the United States leading in overall copper production.
With a supply surplus looming, which the ICSG forecast at 393,000 tonnes this year, the fundamentals are mildly bearish. Much will ultimately depend on whether China manages to keep growth above seven percent, whether the ECB can reignite growth and whether the US can avoid being dragged down by the weakness elsewhere. As well, we feel stocks are not very high and China’s structural supply deficit will mean it becomes a scale-down buyer, supporting the price.
Looking weak for now – Fundamentally, technically and economically, it looks as there may be more room on the downside for copper prices but, with the marginal costs of production not too far below current prices and with potential for stimulus packages in China and Europe.
we would expect range-trading to continue at $5,800-6,800 this year, with the upper prices levels likely to be seen during short-covering rallies. In the first quarter we would look for a $5,500-6,200 range.