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The cost of copper in question

Analysts about the cost of copper this year, contradictory, which is not surprising. On the LME spot price of the red metal has fallen by 10% since January 2015. However, by the end of the month after reaching a 5-year minimum price increased by 5.1% to 5672 USD / ton. Share prices of leading metal manufacturers have changed the same way. In particular, the action «Antofagasta» Chilean companies have fallen by 13% in January, and then rose again. The value of shares «Freeport-McMoRan», USA, decreased by 8.9%. The shares of the Swiss company «Glencore» in January reached the lowest level since 2011, while their value fell by 2.2%.

Analysts used to treat copper as a barometer of the global economy. Now, however, the cost of the red metal is very unstable. As a result, experts find it difficult to determine the further development of the situation. Opinions on the factors influencing the pricing policy, were divided. Some experts believe that the cost of the decline was due to increased production of crude copper with weakened demand. Others blamed the fall in prices speculators hoping at the same time to restore them.

Analysts «Goldman Sachs» believe that the main reason for the low cost of copper is to build up stocks of Chilean copper. That Chile is a recognized leader in the production of copper. According to statistics, in the second half of 2014 the volume of the treated metal in the country is 170 000 tonnes. This figure is the highest in the past decade, except for a small time period in 2013. If we take into account all sources of copper production, supply exceeds demand by 500 thousand. Tonnes on an annualized basis. Representatives of the «International Copper Study Group» International Organization predicts demand growth of 1.1% in 2015. The production according to them will increase by 4.3%. By the end of the year in accordance with these forecasts the excess amount to 393 thousand tons -. For the first time since 2009

According to the «World Bureau of Metal Statistics» in 2014. The surplus of copper was 105 000 tonnes. As for production, it reached 23,010,000. Tons with consumption of 22,905,000. Tons. Chilean Committee «Cochilco» lowered the forecast value of copper from 3 USD / lb to 2.85 USD / lb. In 2016 the price of copper will be about 2,8 USD / lb on the background of the expected surplus in the amount of 404 000 tonnes.

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