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scooter
Penny Pincher Member
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 Posted - 02/10/2009 : 14:25:18
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Copper seen at $4,200/ton in 2009
Author: Agnieszka Flak
CAPE TOWN, Feb 9 (Reuters) - Copper prices are expected to recover to average $4,200 per tonne in 2009, supported by steady construction and infrastructure activity in China and modest recovery elsewhere, a consultant said on Monday.
Standard Bank's (SBKJ.J) Head of Commodities Research Walter de Wet told Africa's largest mining conference he expected prices to pick up in the second half of the year.
"Standard Bank expects copper to be around $4,200 on average ... on the back of a slightly weaker dollar as well as some restocking by copper consumers, especially from China," he said.
De Wet said that while the construction sector in the industrial world, especially in the United States, is under extreme pressure, the sector was growing strongly in China, partially offsetting the drop elsewhere.
"China still remains fairly robust ... fixed urban investment is still growing at 26-27 percent year-on-year and hasn't really budged at all, even during the credit problems we have experienced over the last few months," he said, adding that the country's stimulus package should provide further support.
China has started buying copper from domestic bonded warehouses and overseas markets as it moves to triple its state reserves to about 1 million tonnes, according to trade sources last week.
De Wet said he sees no demand growth for copper from the transport sector and limited demand from the electronics industry, owing to consumer confidence in Europe, the United States and Japan being at lowest levels in decades.
The analyst expects global manufacturing to start expanding again in the middle of next year.
"We expect it (to be) much faster in emerging markets and China, but it will be offset by what is happening in the United States, the euro zone and Japan," he said.
Copper stocks are expected to rise as well, he said, as the real economies contract.
"We expect the leading OECD indicator to drop this year and to flatten next year ... and the visible copper stock is likely to rise keeping short-term prices under some pressure," he said.
Copper prices rose to a more than two-month high on Monday on hopes that economic stimulus packages in China, the world's biggest user of the metal, and the United States will spur demand.
Three-month copper MCU3 on the London Metal Exchange rose to $3,669 a tonne on Monday, the highest level since Dec. 1, from $3,540 at the close on Friday. Copper prices jumped more than 12 percent last week.
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positive article on copper prices
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