CHINA May 06 2015 10:35 AM
NEW YORK (Scrap Register): Copper has been the underperformer in the base metals complex since the beginning of 2014, said BofA Merrill Lynch Global Research.
This is heavily influenced by an unfolding switch in market balances from deficits to surpluses. The challenging fundamental backdrop has also been reflected YTD, with copper falling by around 5% in 1Q15, despite close to 500kt of supply disruptions, equivalent to what we had allowed for the entire first half of 2015.
According to BofA Merrill Lynch, a stabilisation of economic activity in China may support prices in the coming weeks, but a rally is unlikely to be sustained, reflected in our average forecast of $4,969/t ($2.25/lb) in 2016. Having said that, a lack of mine investment and supply growth should push the market back into deficit by 2017.