NEW YORK (Commodity Online): Copper prices may be setting up for a strong rally in Q2, 2011 due to a huge supply deficit, a Goldman Sachs report says. Copper markets are expected to be in deficit by 180,000 tonnes in 2012, the report said.
Within three months, copper is expected to rise to $8000/tonne, $9000 in 6 months and finally $9500 within 12 months.
“While the European debt crisis and macro economic uncertainty have kept the market squarely focused on demand, supply disappointments have continued to dominate copper fundamentals, with concentrate tightening markedly since mid- 2011”, the report adds.
LME copper prices have crashed so far this year. After a high of $10,000/tonne in early 2011, copper is currently trading around $7500/tonne in November.
The report however warns that the the cooling Chinese economy may pose some major downside risk to copper prices in the near term.
