Copper tags to rise at slower pace

Nov 13, 2009 | 10:24 AM | Tatyana Shumsky

Copper prices will extend recent gains in 2010, although at a slower pace, as improving global demand replaces supply concerns as the main driver of the market, according to CPM Group senior base metals analyst Catherine Virga.

"Copper supply is not tight right now. And LME (London Metal Exchange) inventories are up 50 percent since July," Virga said at the American Copper Council meeting in Dallas. But while the recent strength in copper prices reflects a "market premium for looming labor strike-related supply disruptions," prices will remain strong throughout next year on increasingly positive fundamentals, she said.

On the demand side, red metal prices will be buoyed by growing Chinese interest where much of the stimulus package went to infrastructure spending and credit availability remains strong. Similarly, as the economic recovery gains momentum in Europe and the United States, copper demand from manufacturing and industrial production will help lift prices. ....