AFP: Copper demand concerns offsetting supply side fears
By Allen Sykora
Seasonally weak demand, softer physical premiums and concerns over the health of the global economy have offset supply-side fears and capped prices in copper, says Standard Bank. Copper output has been curbed by strikes, lower ore grades and adverse weather in recent months in Chile.
However, industrial metals like copper also are looking at demand, with the euro-zone debt crisis “continuing to resemble a slow-motion train wreck” and with U.S. economic growth “faltering,” Standard says. Much of the copper’s fortunes will hinge on China. “As far as indicators of the metal’s physical demand go however, they continue to look disappointing,” Standard says.
Global exchange inventories have started to rise again, there are reports that bonded Copper stocks in China are increasing, and bonded Shanghai premiums are now around $50 a metric ton, down from $120 in late June, the bank reports.
“With external factors holding increasing sway over copper, the (recently weak) performance of the U.S. equity markets is also becoming a major concern, particularly given the impact that sharp stock-market movements have had on commodity prices in recent years.”
