Jul. 15 (Bloomberg) –Copper may rise as lower ore grades, adverse weather and labor actions hamper production, feeding concern supply will fall short of demand, a survey showed.
Six of 13 analysts, investors and traders surveyed by Bloomberg, or 46 percent, said prices will gain next week. Five predicted a drop and two forecast little change. Copper for three-month delivery was down 0.1 percent for this week at $9,650 a metric ton by 4:30 p.m. yesterday on the London Metal Exchange.
Production of the metal from mines slid 24 percent from a year earlier in the second quarter, Rio Tinto Group said yesterday. Winter storms in Chile this month disrupted output at copper mines including Escondida, the world's biggest. Workers at Santiago-based Codelco, the industry's top producer, this week held the first companywide strike in 18 years.
"The supply side continues to underperform," said Gayle Berry, an analyst at Barclays Capital in London. "The results by Rio illustrate just how challenging the industry is finding it to grow mine production."
World consumption of copper is set to exceed production by 377,000 tons this year, according to the International Copper Study Group. Rio cited lower ore grades at Escondida and Kennecott Utah Copper in the U.S.
The red bars on the attached chart are derived by subtracting bearish forecasts from bullish estimates, with readings below zero signaling the majority of respondents expect a decline. The green line shows the copper price. The survey data shown are as of July 8.
The weekly copper survey has forecast prices accurately in 70 of the past 145 weeks, or 48 percent of the time.
This week's survey results: Bullish: 6 Bearish: 5 Hold: 2