Copper Rallies After Fall in Production
May 29th, 2011 - Posted in Mining StocksCopper will have it chance to go back with its foot in the market after experiencing fall of production for the past months. A report in Reuters stated that the product maybe back on track as the debt issue in the euro zone eases up.
Copper rallies as tight supply view back in focus.
London Metal Exchange trade copper at at USD 9,005 per tonne at 0957 GMT for three months, but the value of the metal used in metal construction fell to USD 8,504.50 on May 12, a five month through and it had a hard time getting back on top again.
Barclays Capital’s analysts Ms. Gayle Berry, said that the news about Escondida gave a picture that the market of the raw materials this year will be tight.
“The headline news about Escondida is a reminder to people that this is a market where the raw material picture is extremely tight this year. We’re not out of the woods yet in terms of a sea change in macro sentiment. People are coming to terms with that we’re transitioning to a phase of more mature growth which will come with a slower growth rate,” Ms. Berry stated.
Escondida of Chile that is the world’s largest mine fell 4.2% in the first quarter of 2011 compared to last year’s 235,270 tonnes. The decrease is caused by lower grades of ore and maintenance. The company stated that it has an output of 157,976 tonnes of concentrated copper, and 77,294 tonnes of copper cathodes.
Ms Berry noticed that the market of iron scap is tightening. Moreover, the differential between the current price of copper and its prices for the past three months indicate an increase in demand for the metal.
LME inventory data shows that its stocks for copper has climbed to 125 tonnes today or 469,375 tonnes. The analyst said the the signs indicates an expected healthy market for the stocks and demands of copper.
