NEW YORK Comex copper
prices continued their downward slide April 22 due to
weaker-than-expected demand from China coupled with an
earthquake that rattled the Sichuan province April
The most actively traded May
copper contract closed April 22 at $3.131 per pound, down 0.6
percent from $3.1485 at the end of last week and 16 percent
below $3.72 per pound at the start of the year.
Market participants said that
ongoing struggles in Europe, weaker-than-expected demand from
China and the April 20 earthquake have all contributed to the
recent decline in Comex prices.
"I think China had a little bit
of a time-out during the transition period from one political
leadership to another, and everyone is still marking time
before the infrastructure projects start to get the green light
again," one trader told AMM.
Chinas refined copper
imports declined to 218,823 tonnes in March, down 1.8 percent
from February and 36.7 percent below March 2012 levels (
amm.com, April 22).
The lower-than-expected demand
from China comes at a time when analysts are forecasting the
global copper market will be in a supply surplus over the next
"Supply of the metal will exceed
demand by 341,000 tonnes this year, more than last years
238,000 tonnes, and the market will be in a surplus through
2017," RJ OBrien Metals Research Groups managing
director of metals, Janet Mirasola, said in an April 22
The expectation of a surplus
encouraged Goldman Sachs to lower its 12-month copper price
forecast to $7,000 per tonne ($3.175 per pound) April 22 from
$8,000 per tonne ($3.629 per pound) previously.
Citi Research Group earlier this
month also lowered its forecast for the 2013 average price to
$3.41 per pound from $3.61 previously.
"Coppers issues are very
plain. Demand is down and supply is up," an analyst said,
although he noted that the wall slide at Kennecott Utah
Coppers Bingham Canyon Mine April 10 will help alleviate
the oversupply problems. "The tragic pit slide at Kennecott
makes the imbalance less severe than it would have been. That
takes away 20,000 tonnes a month."
Kennecott Utah Copper, a
division of London-based Rio Tinto Plc, declared force
majeure April 16 (
amm.com, April 16).
Copper stocks in global London
Metal Exchange-approved warehouses totaled 614,350 tonnes as of
April 18, nearly double stocks of 320,000 tonnes at the
beginning of the year. Inventories in New Orleans warehouses
alone totaled 176,550 tonnes April 18, up from 75,775 tonnes in
the same comparison.