Japan Industry Expects Copper Price at US$ 7,000-8,000/t for 2H

Japanese copper industry expects copper ingot price at London Metal Exchange (LME) could fluctuate around US$ 7,000-8,000 per tonne during half year to March 2007, which might decline to US$ 6,000 at the lowest, according to survey questionnaires to smelters, users and dealers by Japan Metal Bulletin.Yoshihiro Nishiyama, director of Pan Pacific Copper, forecasts 3-month futures copper price at LME could fluctuate in the range of US$ 7,200-8,000 per tonne toward March 2007. He said copper price may decline gradually even entering October-December of demand season following the plunge of crude oil and precious metal markets. However, he pointed out copper price is supported by strong covering purchase and could sustain the level.He said that premium price for copper ingot is decreasing in Europe, the USA and China and that speculators are recently releasing long positions. LME copper price could not exceed US$ 8,000 per tonne only with demand related factors then. On the other hand, he said, copper market stays high when copper ingot supply is tight worldwide. World copper ingot production is decreasing due to shortage of copper ore.Yasuo Tanaka, director of Mitsubishi Corporation Futures, expected LME copper price could keep US$ 7,000-8,000 range in half year to March 2007 while declining to US$ 6,000 in the case the price became to below US$ 7,000. He analyzed copper demand is favorable worldwide and the supply is shortening. Speculative funds already left copper market and consumptive interests are supporting the market when the price decreases, he said. He expected copper price could not exceed record in May 2006 but could sustain the level with stably low inventory at LME.He said copper market might response to revision of labor-management contract at Codelco Chile even not as strongly as the case of Escondida. He also pointed out the recovery of US economy would impact copper market trend.