Copper Traders Diverge From Hedge Funds on Recovery: Commodities – Bloomberg 03-08-13

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Copper analysts are the most bullish in 5 weeks on optimism the global economy is strengthening versus hedge funds the most bearish since August.

Goldman Sachs recommended buying copper for a 16 percent gain to $9000 in 6 months as China copper imports increase.

Barclays says China accounts for 42 percent of all copper usage and North America 11 percent and predicts demand will outpace supply by 288,000 tons in Q2 and Q3. The Copper Development Association says construction accounts for 40 percent of usage.

Carole Ferguson at SP Angel Corporate Finance said copper is well supported by an improving US and China exiting its doldrums Ferguson said copper has been volatile because of high stockpiles, while outside the US there’s still not great visibility and Europe will take a while to turn around.

Steven Lewis at Wood Mackenzie said prices will come under pressure in 2014 as demand slows and supply starts to increase. Ross Strachan at Capital Economics said many developed markets are going down the route of fiscal austerity, though the US is a little stronger so may offset some of the negative effect.

Economists predict US growth to accelerate every quarter to 2.8 percent at the beginning of 2014, and China to grow 8.3 percent in Q2 and Q3 versus 7.9 percent at year-end 2012. The IMF expects a second year of contraction in Europe.

Read the full article at http://www.bloomberg.com/news/2013-03-08/copper-traders-diverge-from-hedge-funds-on-recovery-commodities.html

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