Copper Prices to Fall to $4,500-5,000 in 2010, CNIA Forum

GUANGZHOU, Nov. 6 -- Copper prices are expected to weaken in 2010 to average USD 4,500-5,000/mt due to a forecast base metals slump, said a Jiangxi Copper subsidiary.

    "We are expecting a slump market for base metals in the next year, due to uncertainties over the global economy, falling demand with sluggish exports, and rising supply with expanded capacities," said Shi Zhan, assistant manager at Jinrui Futures Co, at the 9th Secondary Metals International Forum held by China Nonferrous Metals Industry Assn (CNIA) in Guangzhou.

    His reading of next year's markets goes against positive sentiment from institutions, investors and analysts outside China, who largely expect base metals demand to pick up alongside an economic rebound.

    "With the strong rebound in base metal prices, we will see more capacity picking up," said Shi.

    "Although China's copper industry has been suffering from difficult access to concentrate for a long time, I think concentrate supply will go up in the following year, with more mines being invested and exploited," he said.

    "Thus I bet China's copper market will be in surplus by 656,000 mt in 2010 and average prices will be at USD 4,500-5,000/mt," he added.

    Shi expressed doubts about the strength of global economic growth and demand from China.

    "The IMF has forecast a 1.5% and 0.3% GDP increase for US and European countries respectively [but these] are all below the normal level of 2%," Shi said.

    "Although sentiments over Chinese economy remain positive, limp exports, together with rising protectionism, are undermining Chinese economy to some extent," he added.

    "As for the demand side, it is not optimistic at all," he said.

    The base metal price rebound has also seen more than 4.5 million tpy of aluminum capacity resumed as of September, he estimated.

    (Source: Metal Bulletin)