LME Copper to drop to $6,000 metric ton level in 2014: BNP Paribas

UNITED KINGDOM September 20 2013 9:31 AM  

LONDON (Scrap Register): LME copper prices to drop to $6,000 a metric ton level in 2014, said BNP Paribas in a snippet.

BNP Paribas looks for copper to trend lower toward $6,000 a metric ton in 2014, underperforming lead, tin and zinc.  The bank looks for the copper market to remain in a supply surplus.

LME copper prices hit a three-week high on the London Metal Exchange in the aftermath of the late-Wednesday decision by the Federal Open Market Committee to leave its bond-buying program intact, rather than tapering.

Just before 9 a.m. EDT, LME three-month copper was $162, or 2.2%, higher to $7,266.75 a metric ton and peaked at $7,355, its most muscular level since Aug. 27.

“This is not yet fully priced in – copper is still richly priced relative to other base metals and to production costs,” said in a research note from senior metals strategist Stephen Briggs.

BNP Paribas looks for global demand growth of about 4.5% in 2013.

However, the bank said that s a series of new mines, redevelopments and expansions should boost output by close to 600,000 metric tons this year and more in 2014 and 2015. The bank sees world mine output rising 6% in both 2014 and 2015.

“Copper will no doubt continue to see bouts of price strength, notably on positive Chinese economic data. Nevertheless, we still expect copper to slide towards USD 6,000/t as 2014 unfolds,” BNP Paribas concluded.