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Copper prices drop to $6,900 per tonne

Copper prices drop to $6,900 per tonne
By Joan Chirwa
Thursday September 11, 2008 [04:00]

COPPER prices for a three-month delivery on the London Metal Exchange (LME) have fallen to US$6,900 per tonne. And Standard Chartered Bank has predicted that copper prices would struggle to make upward headway in the week ahead. The price of copper fell to a seven-month low last week Friday after a huge jump in supply of the red metal in London warehouses reinforced investors' fears of a demand slowdown.

The Finance Bank weekly update stated that copper for December delivery dropped to US$3.0985 per pound. And Standard Chartered Bank Metals analyst Dan Smith stated that copper prices may struggle to gain in the next few weeks.

The analysis found that the copper price remains vulnerable to speculative spikes should major strike action take hold or should the global economy start to show signs of pulling out of its downward trend.

"More bearish though is that LME stocks have been moving higher, reducing the threat of an imminent squeeze on supplies," stated Smith.

"The market has taken on board the deteriorating demand picture, although there is the prospect of a pick-up in Chinese demand in the weeks ahead, post-Olympics, as power and coal become more freely available.

The main upside risk is that the Chinese government decides to re-stimulate the economy either through a fiscal boost or through loosening of monetary policy."

Labels: COPPER

posted by MrK @ 10:34 PM