The Hindu Business Line : Copper rebounds to $7,280/t

Speculators continue to hold net short positions for the fourth successive week on the COMEX copper market, while LME reported a 1,75,000 tonnes drawdown of its copper stocks.

The world copper market in 2006 will be in a modest surplus of about 240,000 tonnes, in comparison with deficit of 64,000 tonnes in 2005, according to latest data released by International Copper Study Group (ICSG).

However, in usage would result in a production surplus of only about 55,000 tonnes, while on the supply side, ICSG expects world copper mine production in 2006 to rise by 4,1 per cent year-on-year (y-o-y) to 15.48 million tonnes and 5.3 per cent y-o-y to 16.3 mt in 2007.

World refined copper production (primary and secondary) will rise to 17.56 mt in 2006, up 6.8 per cent y-o-y and 18.19 mt in 2007, posting 3.6 per cent increase, according to ICSG.

Also, while copper concentrate inventories accumulated in previous years were expected to be sufficient to account for the disparity in growth between concentrate production and refined production in 2006, a shortfall of concentrates in 2007 may restrain growth of refined production.

On the demand side, according to ICSG, world refined copper usage fell 1.3 per cent in 2005 to 16.51 mt, while in 2006 a recovery was expected with usage seen increasing by about 4.9 per cent y-o-y to a record 17.31 mt.

Demand growth was anticipated in all major consuming regions led by Asia, with growth of around 6 per cent and the European Union showing the lowest growth rate of about 2.5 per cent. For 2007, ICSG projects world copper use to grow 4.7 per cent y-o-y to 18.13 mt.