Market Nuggets: Deutsche Bank: Copper Could Approach $9,000/MT In Second Quarter

Friday January 25, 2013 9:30 AM

Copper prices could approach $9,000 a metric ton in the second quarter, says Deutsche Bank. “We expect that, despite high copper stocks, net copper imports into China will likely remain elevated in the first half of 2013, with some re-stocking taking place at the consumer level,” the bank says. Chinese bonded warehouse stocks estimated to have risen by 500,000 tons in 2012, with copper cathode now being used as a financing tool in addition to industrial applications, Deutsche Bank says. The bank looks for economic activity to pick up in 2013, but says credit conditions are unlikely to change, meaning the financial incentive remains and bonded stocks continue to rise. Copper premiums could rise, but Deutsche Bank says it doubts they would increase enough to incentivize liquidation of finance-related stocks. “We also believe that there is a good chance that Shanghai copper (SHFE) outperforms that of the LME such that a positive arbitrage may appear – albeit briefly. This could result in greater-than-expected imports of cathode within the next three to four months.”

By Allen Sykora of Kitco News [email protected]