THE Standard Chartered Bank has forecast copper prices to reach above US$8,000 per metric tonne in the first quarter of 2011. Last week, copper traded at the highest price in four months spurred by the positive manufacturing data from China.
Copper prices are a reliable measure of the general health of the global economy and are therefore closely monitored across different financial markets. This is contained in the Standard Chartered Bank publication entitled Commodity Outlook released in Lusaka yesterday.
“We are forecasting that copper prices rally to average US$7,850 per tonne in fourth quarter (up from US$7,650 per tonne previously), and that prices rally further into 2011 to average US$8,325 per tonne (up from US$7,900 per tonne),” it says.
The bank states that the London Metal Exchange (LME) three-month copper prices have rallied sharply from their lows of early July, and are now trading above US$7,500 per tonne for the first time since April.
China’s official Purchasing Managers Index (PMI) rose to 51.7 in August from 51.2 in July. It says rise in the prices comes despite a run of poor economic data out of the United States of America.
The bank says, “We continue to believe that the outlook for copper is bullish and have upgraded our price forecasts.”
It says the main reason for this is that a number of projects are coming through more slowly than we previously anticipated and the risks for faster growth seem to be moving to the upside, after the upturn in China’s manufacturing PMI for July, and better-than-expected growth in other parts of Asia.
[Daily Mail]