Market and product
Copper rally to continue into 2013: Market players
According to Goldman Sachs Group Inc. copper prices are expected to climb 12 % in 2012 to $11,000 a ton.
In fact the market rally of copper is expected to continue well into 2013, the period when the world expect to see a supply surge when miners go from red to green, reported Bloomberg quoting experts and market players.
The growth story that is exclusively exhibited by the emerging markets will add to the rally.
The base metal gained at least 30% on demand surge and supply shortage in 2010 with demand exceeding supply by 234,000 tons. The market, in fact swung back to a deficit problem for the first time since 2007 on the muscle of global demand as exemplified by Chinese car sales gaining acceleration as well as instances of heat-waves.
China produced 4.37 million tons of refined copper in the period between January and November in 2010, a 13% surge compared to 2009.
Copper in 2011
In 2011, global copper demand is expected to outpace supply by humongous volumes: 635,000 metric tons; the first case of a deficit since 2004.
An expert with J.P Morgan expects the deficit to be somewhere between 500,000 tons to 600,000 tons in 2011.
Morgan Stanley pegs copper prices to average $4.45 a pound in 2011, 24% up from a previous estimate.
Consumption estimates by Pan Pacific puts a 5.1% climb taking the figures to 19.72 million tons for the current year. In 2010, the figure was at 18.76 million tons an increase of 8.6 %.
Meanwhile, world production of copper is supposed to increase 3% to touch 19.08 million tons subsequent to a growth of 1% in 2010 that took the figures to 18.52 million tons.
China is expected to produce 4.95 million tons current year from 4.5 million tons in 2010.
Copper for three-month delivery jumped 0.3 percent to reach $9,607 a ton on the LME at 10:18 a.m. in Tokyo.
Japan and China factors
The Chinese consumption is expected to come down by half as monetary tightening gains pace there. Copper inventories in Shanghai Futures Exchange warehouses climbed to top level in seven months, augmenting 481 tons to 132,647 tons last week, the bourse data said.
Things are expected to get better there by the Chinese Lunar New Year, according to Goldman Sachs.
Japanese output of copper may decline to 1.44 million tons or a drop of 6.5 % in 2011, attributable to production cuts in its two smelters even as consumption is also expected to come down to 1.04 million tons; a 1.9% fall. Exports are also deemed to fall and may total 450,000 tons in 2011, down 15.4 percent compared to previous year.
The world may see global demand for copper exceeding 20 million tons in 2012 for the first time, even as output may jump 6.2 percent to 20.26 million tons.
