Commodity Watch: Goldman Sachs Still Bearish on Copper

by MetalMiner IndX Reports on

Despite a recent recovery in copper prices on the London Metal Exchange and economic reforms pledged by China, the world’s largest copper consumer, market analysts were still bearish this week on the metal’s price for the rest of the year. Goldman Sachs cited factors such as a surge in supply and a weak Chinese construction sector. Goldman Sachs forecasted copper prices would sink to $6,200/mt by the end of the year, compared with a price at $6,845/mt as of early Wednesday trading.

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“In particular, we believe [Chinese] copper-intensive construction completions growth is set to remain weak for the rest of 2014, given the already weak new [housing] starts data,” Goldman analysts said Tuesday in their Commodity Watch report. “Looking further ahead, any continued weakness in new starts would have bearish implications for completions in [the second half of 2015] and 2016.

Rising 2.1 percent to close at JPY 736,000 ($7,199) per metric ton, the Japanese copper cash price experienced the biggest change for Wednesday, May 14. The price of US copper producer grade 110 declined 0.5 percent to $3.84 per pound, after two days of improvement. The price of US copper producer grade 122 closed at $3.84 per pound. Following a couple days of improvement, prices fell by 0.5 percent. After improving for two days, the price of US copper producer grade 102 declined 0.5 percent to $4.03 per pound.

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Chinese copper prices were mixed for the day. The price of Chinese copper wire closed at CNY 50,085 ($8,041) per metric ton. Following a couple days of improvement, the metal’s price weakened by 0.9 percent. The price of Chinese copper bar changed direction with a 0.7 percent drop. After two days of improving prices, the metal finished at CNY 51,000 ($8,188) per metric ton. Following two days of rising prices, the Chinese copper cash price dropped 0.7 percent to CNY 51,200 ($8,220) per metric ton. The price of Chinese bright copper scrap was unchanged at CNY 44,300 ($7,112) per metric ton.

On the LME, the cash price of primary copper declined 0.6 percent to $6,884 per metric ton. Also on the LME, the copper 3-month price fell 0.5 percent to $6,844 per metric ton.




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