SG:Copper seen hitting new records in Q4 on higher Chinese imports
Business News Americas reported that the price of copper is expected to leave behind its current relative weakness and hit an average of USD 12,000 per tonne during the last quarter of this year.
According to Mr Nicholas Snowdon analyst of UK based investment bank Barclays Capital said that a much awaited improvement in Chinese copper imports levels and a decline of stocks at the London Metal Exchange will be the main drivers of the renewed upward trend.
Mr Snowdon said that copper import levels in China have been somewhat lighter than originally expected for the first months of 2011 due to the impact of a prolonged destocking cycle. As the process starts to reach its end due to domestic stocks depletion, improvement in import levels will in turn tighten the domestic market balance. Also, stocks on the LME are expected to start declining in Q3, offering a clear catalyst for prices to rise towards the last quarter.
Tight global supply and strong Chinese demand will be sufficient drivers to push the market into a significant deficit to the extent that a scarcity premium will drive the price to new record levels.
