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BIZCHINA> Top Biz News
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Copper prices may dip on ample supplies
(China Daily/Agencies)
Updated: 2009-10-09 08:15
Copper will likely drop in the fourth quarter, paring this year's 99-percent gain, because of ample supply, according to Nexans SA, the world's biggest maker of cables and wires. Copper premiums, added to the price of metal on the London Metal Exchange and a signal of demand, have shrunk, Christian Velten-Jameson, Nexans' corporate vice-president of finance, treasury and metals, said in an interview. Stockpiles in warehouses monitored by the LME expanded 35 percent since July. "If you look at the physical market I see pretty depressed prices over the coming months," Paris-based Velten-Jameson said. "Prices are likely to fall this year and part of next year. It really depends on when growth will pick up." China, the world's largest copper consumer, imported record amounts of the metal in the first half before purchases slumped in July and August. Global demand will shrink 2.1 percent this year before rebounding 3.3 percent next year, Bank of America Merrill Lynch estimates.
"We can get copper on the spot market for around $50, even below," he said, referring to the premium paid per ton of metal. "In the physical market there is certainly not any kind of shortage of copper and this is evidenced by the spot premium being low right now." The spot premium was about $100 in May and is now at $50 to $60 a ton, the company said in a separate e-mail. At the end of May, 21 percent of all copper in LME warehouses was booked for delivery. Today, the proportion is 2.6 percent. LME copper for delivery in three months rose as much as 1.4 percent to $6,180 a metric ton yesterday and traded at $6,164.75 a ton as of 10:03 am in Singapore. December-delivery copper on the Comex division of the New York Mercantile Exchange climbed 1 percent to $2.8070 a pound.
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