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Analysts Bullish on Copper Prices

Metal News - Published on Tue, 14 Jan 2020

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Analysts are bullish that the price of copper could jump in 2020 with capital spending for new production down and stockpiles tapped out at a time when US China trade tensions are easing. Citigroup Inc sees demand in China, the top consumer, jumping 2.6% after barely rising in 2019, powered by power grid and automaker investments. Goldman Sachs Group Inc analysts see prices at USD 7,000 a tonne in 2020.

However, some analysts expect the downward trend in China’s gross domestic product growth to continue slowing, despite the recent breakthrough with the US on a first-step trade agreement, limiting copper’s upside. BMO Capital Markets analyst Tai Wong said “Copper seems to have found a good short-term base above USD 6,000 but a further rally may have to wait until after the preliminary trade truce is signed. You can’t be greedy in this kind of environment.”

Goldman Sachs analysts also said after the Iranian crisis “Any further escalation of geopolitical tension has the potential to dampen economic activity and weaken demand for base metals.”

Inventories at warehouses tracked by the three international exchanges, a last resort for supply, have shrunk by about 37% since July to just shy of 300,000 tonnes, equivalent to just 1.2% of global consumption. Meanwhile, mine production fell 0.4% last year from 2018.

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Posted By : Rabi Wangkhem on Tue, 14 Jan 2020
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