Copper prices hit a nine-month low this week, continuing the decline since the beginning of the year. At present, the decline has reached more than 10%. Analysts and traders said that they have seen the trend of copper prices this year.
Nick moore, an analyst at ABN Amro, said last Friday: "(Copper prices) are falling ... zigzag."
The benchmark three-month copper on the London Metal Exchange (LME) fell as low as $5,625 per ton this week, far below the high of $8,800 reached in May last year, but still more than double the price three years ago.
Moore said: "There are many key factors, such as China factor and supply interruption ... the market may fluctuate greatly."
However, at present, the market is most concerned about the persistent concern about the decline in demand, and the recent increase in copper stocks is a reflection of this trend.
In the first week of June 5438+ 10, LME's European inventory increased by more than10.2 million tons to/kloc-0 1.94875 million tons, and the current inventory level is more than twice that of the beginning of 2006.
"Obviously, inventories are still increasing significantly, so the market has a clear view of short-term trends," said Sean corrigan, chief investment analyst of Diapason Commodities Management.
LME's global inventory is about 256,758 tons, equivalent to five and a half days of global consumption.
Robin Bhar, an analyst at UBS Group AG Group AG, said that fund-raisers and speculators have recently sold COMEX copper on a large scale and speculatively? Short positions also hit a record high.
He said that due to the increase in inventory, there has been a positive price difference in recent contracts, and it is obvious that the long-term market tension has disappeared.
China's reduced demand is one of the main reasons.
Physical traders predict that the price of three-month copper will fall below $5,000 within six months due to falling demand.
"The question now is whether the price will remain around $5,000 or $4,000," said another physical trader, adding that historically, this price level is still high.
British consulting firm Bloomsbury Minerals Economics predicts that the market supply will be slightly greater than the demand in 2007, with a surplus of about 6.5438+0.37 million tons and a surplus of about 6.5438+0.43 million tons in 2008.
The direct reason for the increase in inventory is the decrease in consumption in China in 2006 and the economic slowdown in the United States, another major consumer of copper.
"If the US doesn't go into recession ... and China returns to the market, prices may go up," said one analyst.
JPMorgan Chase predicted that the average price of three-month copper in the first quarter of 2007 would be $6,600, but thought that it would drop to $4,500 in the last quarter.