LONDON (Commodity Online): Analysts with Barclays Capital said that many views expressed during last week’s CESCO Asia Copper Week were for weak demand and low expectations. During the week, Codelco offered to cut 2013 premiums for China.

“Many traders had hoped for a bigger cut, but most participants we talked to expect contracted tonnages to fall only by around 10%, given the need to maintain a steady supply amid uncertainties,” said Barclays.

According to the British bank, market participants also expected treatment and refining charges to rise, reflecting increased mine supply. The higher mine supply means “considerable downside risk” to its first-half copper price forecast of $8,850 a metric ton.

“A sustained improvement in prices looks unlikely until there is evidence of draws in Chinese inventories. Feedback on physical demand was mixed but expectations were mostly for soft demand overall, with some semi producers reporting an increase in orders. But many others painted a deteriorating picture. Lackluster demand may have been exacerbated by overcapacity,” Barclays added.

“The high levels of bonded warehouse stocks have weighed on premiums and Shanghai prices, creating a self-reinforcing cycle that kept stocks at elevated levels. It would likely take an external shock to reduce these levels,” Barclays concluded.