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Copper May Advance on China Import Speculation, Survey Shows
Copper may rise on speculation imports of the metal into top global consumer China are set to climb, signaling stronger demand, a survey showed.
Eight of 17 analysts, investors and traders surveyed by Bloomberg, or 47 percent, said prices will gain next week. Seven predicted a drop and two forecast little change. Copper for three-month delivery was up 0.6 percent for this week at $8,988 a metric ton by 1:30 p.m. yesterday on the London Metal Exchange.
Copper inventories tracked by Shanghai’s futures exchange fell 36 percent last month and 21 percent in April. Stocks in bonded warehouses, which are undisclosed, may have dropped by half over the past two months, Chinese traders and analysts estimated this week. Industrial production in the country is expanding even as interest rates rise.
“Fundamentals are still quite good and are still improving, given the latest production figures from China,” Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said by telephone yesterday. “Inventories are being destocked, especially in China at the moment. These two aspects lead to higher import needs.”
China’s industrial output gained 13.3 percent from a year earlier in May, statistics showed this week, little changed from the prior month’s 13.4 percent increase. The country’s central bank has raised borrowing costs four times since September. Copper shipments into China slipped 3 percent last month from April, according to customs data released June 10.
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 June 10.
The weekly copper survey has forecast prices accurately in 69 of the past 141 weeks, or 49 percent of the time.
This week’s survey results: Bullish: 8 Bearish: 7 Hold: 2
To contact the reporter on this story: Agnieszka Troszkiewicz in London at atroszkiewic@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net