Friday, March 23, 2012

Copper prices outlook next week march 26-30 2012

Copper prices outlook next week march 26-30 2012, copper expect march 26 2012 ; Copper traders extended a bearish streak into a second week on mounting concern that demand is weakening after manufacturing contracted from China to Europe.

Twelve of 29 analysts surveyed by Bloomberg expect the metal to decline next week and seven were neutral. Inventories at bonded warehouses in Shanghai more than doubled since the fourth quarter, a survey of seven traders and analysts showed. Separate stockpiles monitored by the Shanghai Futures Exchange are near the highest in at least nine years, bourse data show. China consumes 40 percent of the world’s copper.

Factory output in Germany and France unexpectedly shrank in March, adding to signs Europe is sliding into recession, and a measure of China’s manufacturing fell to the weakest since November, reports showed yesterday. Chinese Premier Wen Jiabao cut the country’s annual growth target to 7.5 percent earlier this month, the lowest since 2004. Europe accounts for about 18 percent of global copper demand, Barclays Capital data show.

“A slowdown in Europe and China is not good for the long- term outlook,” said Jeffrey Sherman, who helps manage about $30 billion of assets for DoubleLine Capital in Los Angeles. “It feels that we could repeat 2011, where we had a good first half and then there was a correction.”

Copper rose 10 percent to $8,386 a ton this year on the London Metal Exchange. Prices were little changed through most of the first six months of 2011 and then plunged 26 percent in the third quarter. The Standard & Poor’s GSCI gauge of 24 commodities climbed 8.4 percent this year and the MSCI All- Country World Index (MXWD) of equities advanced 11 percent. Treasuries lost 1.6 percent, a Bank of America Corp. index (MXWD) shows.

Manufacturing Shrinks
A preliminary purchasing managers’ index for China from HSBC Holdings Plc and Markit Economics dropped to 48.1 from 49.6 last month, with readings below 50 signaling shrinkage. China’s growth slowed throughout last year to 8.9 percent in the fourth quarter. The economy will expand 8.3 percent this year, the lowest since 2001, according to the median of 13 economist estimates compiled by Bloomberg.

A gauge of euro-region manufacturing fell to 47.7 in March from 49 in February, Markit said. The area’s economy is probably in recession after a contraction of 0.3 percent in the fourth quarter, said Chris Williamson, the chief economist at Markit.

Metal at bonded warehouses in Shanghai, which are exempt from a value-added tax and import duties, climbed to 530,000 tons last week, the survey showed. They were at about 200,000 tons in the fourth quarter, according to Qu Yi, an analyst at CRU International Ltd.

Copper Inventories
Copper rose as much as 15 percent this year as a 115,450- ton decline in stockpiles in warehouses monitored by the London Metal Exchange spurred confidence that demand was strengthening. The gains in Chinese reserves are reversing that assumption and signal that the 12 percent jump in the country’s imports of refined copper last month may not be reflecting consumption.

While copper declined 4.3 percent since reaching an almost five-month high on Feb. 9, hedge funds and other money managers got more bullish last week. They raised their bets on higher prices by 4.7 percent to 14,259 futures and options in the week ended March 13, Commodity Futures Trading Commission data show.

“The recent China-related selloff was overdone,” said William O’ Neill, an Upper Saddle River, New Jersey-based partner at Logic Advisors, a commodity consultant. “I see U.S. and European demand gradually improving.”

Improving Demand
About $5.6 trillion has been added to the value of global equities this year amid better-than-expected economic data in the U.S. and optimism that the euro area will contain its debt crisis. Greek Prime Minister Lucas Papademos won parliamentary approval for a new 130 billion-euro ($171 billion) international bailout on March 21 after the nation pushed through the biggest sovereign restructuring in history earlier this month.

Federal Reserve Chairman Ben S. Bernanke said March 21 that reduced stress in Europe is a “welcome development” for the U.S., which echoed the Fed’s statement last week that “strains in global financial markets have eased.” Improving data has raised speculation the central bank will refrain from buying more debt even as it said interest rates are likely to remain near zero through at least late 2014.

Copper for immediate delivery traded at a premium of as much as $35 to the LME’s benchmark three-month contract on March 19, the most in more than a year. The so-called backwardation may signal concern about near-term supply. Demand will outpace output by 323,000 tons this year, a third consecutive shortage, Barclays estimates.
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copper futures prediction march 26-30 2012, copper prices forecast march 26 2012,
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