Copper futures and spot prices on the national exchange platform may remain weak in the second half of 2008 mainly on rising output in china and major mines across the globe, reduced imports by China and higher exchanges stock.
In the first half of 2008, inflation and higher commodity prices had jittered global financial markets. Metals markets have become more sensitive to reports of macroeconomic data on the US and Asian slowdown.
With fundamentals turning weaker for industrial metals, copper could witness an era of softer price regime amid slower expansion of world markets and seasonal low demand, said Debjyoti Chatterjee, MAPE ADMISI Commodities, in a bi-annual outlook 2008 report.
In the month of May, copper prices on LME stood at $7,945 a tonne compared with $8,580 a month earlier. Copper LME 3-month prices bounced back after testing $7740 a tonne in the month of June.
?Copper prices may consolidate with a bearish bias and test $7600 a tonne in the second half of 2008. MCX copper had rebounded after testing Rs 328 a kg and sharply rallied along with rising open interest on the exchange. Market could decline further in the second half of 2008 to test Rs. 308 a kg,? he said.
Cumulative warehouse stocks (LME, COMEX and Shanghai) had gradually declined from 2.43 lakh tonne in October 2007 to remain at around 1.70 lakh tonne, currently. Total warehouse stocks have rebounded in the month of May 2008 to 1.82 lakh tonne after falling for three consecutive months in 2008.
Prospects of rising production in major mines across the globe had kept market sentiments bearish. Rising domestic production in China also pose a concern as long term demand prospect is expected to remain weak.
China produced 1,162,700 tonne of refined copper in the first four months of 2008, up 17.7% from a year earlier.