Copper Market News (Feb. 25-Mar. 1)

SHANGHAI, Mar. 4 (SMM) – SMM selects the following two pieces of copper news for last week:

Goldman Sachs Expects Copper Prices to Increase 15% in Six Months
Goldman Sachs predicts that copper use in China will jump 8% to a record 8.833 million mt this year, boosting global demand and leading to a 6,000 mt supply deficit, compared with a surplus of 216,000 mt in 2012. Goldman Sachs reported on February 19 copper prices in London will probably increase 15% to USD 9,000/mt in 6 months, more than doubled the gain seen last year.

Refined Copper Inventories Up Slightly, Spot Copper Concentrate TC/RC Down Marginally 
Refined copper stocks during January at Chinese copper smelters increased to 4.4 days, up slightly from December's 4.1 days.

In SMM's view, the average operating rate at copper smelters fell in January and reduced sale volumes, but most smelters were upbeat about future copper prices. In addition, spot copper traded at discounts except for January14-15 when SHFE 1301 copper contracts were delivered, which depressed smelter interest in moving goods. In this context, refined copper stocks at copper smelters increased marginally in January.

Although spot copper concentrate TC/RC inched down to USD 70-75/mt (cents 7.0-7.5/lb) in January, copper smelters already prepared sufficient copper concentrate stocks when TC/RC was comparatively high in earlier stages. Large smelters normally secure long-term contracts, so many expressed little interest in buying spot copper concentrate.