• 3-month LME copper breaks lower on a lack of confidence about China amid talk about financing deals
• Market has overreacted to the possible outcome of unwinding, in our view; we do not see it happening
• We maintain our full-year price foreca...
• China – We revise up our forecast for copper demand growth for this year to 9%, after a strong summer
• Mine costs – We see a dramatic rise in operating costs for copper, with Chile losing competitiveness
• LME warehousing – We expect continued ...
Copper consumers in China maintain low-inventory strategy on bearish price outlook and tight credit
• Recent macro policy changes aimed at supporting growth have not boosted consumers’ confidence
• We maintain 5% growth forecast for China’s 2013 ...
China has issued a regulation to tighten supervision on commodities used in financing
• The regulation is likely to reduce leverage and encourage the unwinding of financing deals
• 3M LME copper faces downside risks in the near term, but the impa...
Demand – Problems in Europe are offsetting a seasonal upturn in China
• Supply – Chilean strike hits copper shipments and miners are planning further action
• Market – LME stock rise needs careful interpretation; premia rally despite stock overhan...
• Our discussions with copper consumers in China show that demand is improving
• Manufacturers are restocking copper products in preparation for the peak consumption season in Q2
• Refined copper stocks remain at a record-high level, providing hea...
We were impressed by the scale and operations of Konkola and Muliashi mines in Zambia’s copper belt
• Zambia needs to add 300MW grid facility to grow production from the belt to 1.5mt from 1mt now
• We believe Zambia has an exciting future in copp...
• Most in China’s copper business are neutral on the price outlook for H2-2012
• The majority expects China’s H2 copper demand to be soft, at best
• 3M LME copper price has bottomed out, but recovery in H2 will be capped by real demand...
• Copper stocks in China have reached about 1mn tonnes – the highest level ever
• Stocks are building along the supply chain, with demand improving only marginally
• Avoid being too bearish – we expect a stronger H2 despite near-term headwinds fro...
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The world economy is in transition. Global growth rates are picking up, but transition means elevated risks and volatility.
In terms of global implications, all eyes will be on the US and China, with the US normalising monetary policy and China rebalancing its economy.
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