Japan Industry Expects LME Copper Price to Keep High

Japanese copper industry interests expect the copper ingot price keeps high level at London Metal Exchange under tight supply and aggressive purchase by speculative money. Pan Pacific Copper expects the LME cash price is US$ 7,000-9,000 per tonne in October-December when worldwide demand is in demand peak season. Pan Pacific Copper sees the demand is strong when Chinese demand increases the copper ingot import to annualized 1.3 million tonnes through August compared with around 800,000 tonnes in 2006. The demand is firm in Europe while the US supply is balanced despite of subprime loan issue. Pan Pacific Copper sees the copper ore supply is tight under output reduction by Grasberg copper mine in Indonesia. The tight ore supply could reduce smelting output. The firm expects speculators return to commodity market after credit ease in USA and the copper ingot price could renew record. The firm forecasts the ingot price weakens to US$ 7,000-7800 per tonne in early 2008 due to lower demand toward Chinese New Year.Mitsubishi Corporation Futures & Securities expects the LME 3-month future price is US$ 6,500-8,500 per tonne in 6 months from now. The firm sees speculators’ money lifts the price level after such money returned to commodity market under lower US interests rate. The firm analyzes the copper supply is balanced when LME stock is stable at around 130,000 tonnes. The firm expects LME copper price could increase more in the year but couldn’t renew the record.