Wednesday, 10 Feb 2010
According to Barclays Capital, copper may jump 34% in 2010 as the global economic recovery gathers momentum.

Mr Yingxi Yu the company’s Singapore based analyst said that the cash contract on the London Metal Exchange may average USD 6,875 per tonne in 2010, 5% higher than an earlier estimate. Immediate delivery copper in London averaged USD 5,148 per tonne last year and traded yesterday at USD 6,567.

According to the Copper Development Association, Barclays joins Morgan Stanley and UBS AG in predicting higher copper prices as demand improves. Copper is an indicator for the world economy and sets the pace for other industrial metals because about two-thirds of all the metal produced is used in electrical applications.

Mr Yu said that the combination of growth starting from a very low base and still very simulative, depression combating economic policies will continue to support growth at least for the H1 of 2010. There is likely to be a phase of restocking in the OECD countries, which have gone through a period of aggressive destocking and that should help to contribute to the growth numbers as well.

The International Monetary Fund forecast January 26th 2010 that the global economy will expand 3.9% this year compared with its October projection of 3.1%. Even so, the agency said that the global financial system remains fragile. Barclays is calling for global growth to average 4.2% in 2010.

Barclays increased its copper price forecast 22% to USD 7,900 in the Q1 10% to USD 7,400 in the Q2 and 3% to USD 6,200 in the Q3. It lowered its Q4 call 14% to USD 6,000.

(Sourced from Bloomberg)