UNITED KINGDOM October 14 2013 10:04 AM
LONDON (Scrap Register): There are conflicting signals on copper, said Barclays Capital in a research note.
“On the one hand, contract copper premiums for 2014 seem likely to be settled much higher than for 2013, and buyers want to secure more metal on contract,” they added.
“These are bullish signals. On the other hand, supply is growing fast, contract TC/RCs (treatment and refining charges) appear set to settle at multi-year highs, and the refined market is heading towards surplus. Attention has turned from whether supply is improving to how big the surplus next year will be,” the firm continued.
“In our view, these conflicting signals are likely to keep copper prices within recent ranges in the short term. However, once signs of the surplus emerge, we expect prices to break below $7,000/t,” Barclays noted.
Analysts said that there seemed to be a lack of strong conviction and mixed sentiment overall toward base metals at London Metal Exchange Week this week.
“Feedback from our meetings showed that market participants are neutral to bearish (on) zinc and aluminum, neutral on copper, becoming more constructive on nickel and bullish on lead and tin,” Barclays concluded.