Copper market deficit for 2011 is expected to rise a stupendous 131% as lower production and increased demand continue to attract speculators into the base metal.Demand will outstrip supply by 495,000 tonnes in 2011 as compared to 214,000 tonnes last year, says Akira Miura of Pan Pacific Copper Co., Japan’s biggest producer and even though the shortage may shrink to 31000 tonnes in 2012, the tightness is expected to continue due to lower stockpile-to-use ratio, Bloomberg reported.
-The current year deficit will be largest since 2004 and an increase of 131% as compared to the previous year.-Chinese stockpiles have depleted in recent weeks and they may take to restocking the inventory. The arbitration opportunity between Shanghai and London metal exchange will provide the added incentive for Chinese imports.
-The Japanese reconstruction post the March earthquake may result in imports to almost double this year.Copper prices at the LME have fallen from $10,000/tonne levels to trade around $9000 as of end-August. However, Mirua expects prices to touch $10,000 this year.With Goldman Sachs estimating mine strikes to account for 8% production loss this year, the increased Chinese and Japanese demand will possibly push Copper prices to the magical 5 digit figure of $10,000 yet again.....
- Umesh Shanmugam
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