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Inventory up, Copper projected to drop
After China Expands Stockpiles, Survey Shows

By Chanyaporn Chanjaroen

Dec. 24 (Bloomberg) -- Copper may drop on speculation bigger stockpiles in China, the world’s largest user of the metal, will keep imports below record levels, a survey showed.

Eleven of 22 analysts, investors and traders surveyed by Bloomberg said copper would fall next week. Nine predicted higher prices and two were neutral.


Copper stockpiles tracked by the Shanghai Futures Exchange have risen almost sixfold to 104,377 metric tons, from 17,822 tons at the beginning of the year, according to the exchange. Unaudited inventories may be 900,000 tons to 1 million tons, Royal Bank of Scotland Plc estimates.

“China has been a key driver in prices but the nation has been accumulating stockpiles from imports,” Daniel Major, an analyst at RBS, said by phone. “That’s one of the headwinds we see going for next year.”

The red bars on the attached chart are derived by subtracting the bearish forecasts from the bullish estimates, with readings below zero signaling the majority of respondents expecting a decline. The green line shows the copper price. The data shown are as of Dec. 18.

Shipments of refined copper into China totaled 194,388 tons in November, 15 percent more than in October. That’s 49 percent below record imports of 378,943 tons in June.

Copper for three-month delivery rose 2.3 percent this week to $7,005 a metric ton by 5 p.m. yesterday on the London Metal Exchange.

The weekly copper survey has forecast prices accurately in 33 of the past 69 weeks, or 48 percent of the time.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aXKcvvZ1zS5s