Supply growth is seen putting downward pressure on copper prices this year, but the falls are expected to be cushioned by steady demand for the metal used in power and construction as the global economy recovers, a Reuters poll showed.
Of the six base metals, nickel prices are expected to record the biggest percentage rise for the year, with the rest also seen posting gains in 2014 except copper and aluminium.
The average forecast for 2014 cash copper pricesfrom 26 market participants surveyed over the last three weeks was $6,900.10 a tonne, down 6 percent from 2013 average prices, and not far from the previous prediction of $6,816.50 a tonne in a similar poll in April.
In 2015, prices are predicted to drop slightly to $6,889.40 a tonne, weighed by higher supplies.
The copper market is expected to be in a 226,000-tonne surplus by the end of 2014, compared with the previous poll's consensus of a 228,000-tonne surplus. The surplus is seen rising to 285,000 tonnes in 2015, up from a previous forecast of 262,000 tonnes.
"Copper mine supply is still expected to experience strong growth in 2014. As such, it would not surprise us for copper supply to cyclically recover from recent production setbacks," said Justin Lennon, analyst at Mitsui Bussan.
The economy of top copper consumer China grew by 7.5 percent between April and June from a year earlier, slightly above expectations and quickening from the 7.4 percent pace in the first quarter, reinforcing hopes that a recovery is under way after a flurry of government stimulus measures. [ID:nB9N0P602G]
A recent investigation into metal financing in China's Qingdao port had put pressure on prices, as investors worried that a clampdown could hit copper imports. The effects, however, were expected to be temporary, analysts said.
"There is a risk of a disruptive run-down of stocks being held off exchanges for financing deals. However, given the outlook for global interest rates, we suspect that these volumes will re-enter the market relatively gradually," said James Glenn, senior economist at National Australia Bank.
Aluminium is expected to post a surplus of 235,500 tonnes this year, up from a previous forecast of a 68,107-tonne surplus, but the market is seen tightening significantly in 2015 to show a 4,444-tonne deficit.
Low aluminium prices have prompted cutbacks from some producers, and aluminium stocks held in London Metal Exchange-registered warehouses are at their lowest since September 2012.
Cash aluminiumis expected to average $1,825 per tonne in 2014, up 2 percent from previous forecasts, according to 25 analysts. The projected price is 1 percent lower than last year's average.
Source: Reuters
Of the six base metals, nickel prices are expected to record the biggest percentage rise for the year, with the rest also seen posting gains in 2014 except copper and aluminium.
The average forecast for 2014 cash copper prices
In 2015, prices are predicted to drop slightly to $6,889.40 a tonne, weighed by higher supplies.
The copper market is expected to be in a 226,000-tonne surplus by the end of 2014, compared with the previous poll's consensus of a 228,000-tonne surplus. The surplus is seen rising to 285,000 tonnes in 2015, up from a previous forecast of 262,000 tonnes.
"Copper mine supply is still expected to experience strong growth in 2014. As such, it would not surprise us for copper supply to cyclically recover from recent production setbacks," said Justin Lennon, analyst at Mitsui Bussan.
The economy of top copper consumer China grew by 7.5 percent between April and June from a year earlier, slightly above expectations and quickening from the 7.4 percent pace in the first quarter, reinforcing hopes that a recovery is under way after a flurry of government stimulus measures. [ID:nB9N0P602G]
A recent investigation into metal financing in China's Qingdao port had put pressure on prices, as investors worried that a clampdown could hit copper imports. The effects, however, were expected to be temporary, analysts said.
"There is a risk of a disruptive run-down of stocks being held off exchanges for financing deals. However, given the outlook for global interest rates, we suspect that these volumes will re-enter the market relatively gradually," said James Glenn, senior economist at National Australia Bank.
Aluminium is expected to post a surplus of 235,500 tonnes this year, up from a previous forecast of a 68,107-tonne surplus, but the market is seen tightening significantly in 2015 to show a 4,444-tonne deficit.
Low aluminium prices have prompted cutbacks from some producers, and aluminium stocks held in London Metal Exchange-registered warehouses are at their lowest since September 2012.
Cash aluminium
