JP Morgan revises 2011 Cu forecast

摘要

JP Morgan has pulled back its full year n2011 estimate for copper to $9,659mt from $9,713/mt previously but upped nthe 2012 forecast to $9,750/mt from n$9,500/mt before, it said Wednesday. n“We drop our 2011 forecast basis the nabsence of Chinese spot demand in n2011 [year-to-date] and expectation nfor still subdued offtake in the near to nmedium term,” strategist Michael Jansen nsaid in a research note. Jansen added nthat: “We have reduced our expected n2011 calendar year deficit in copper by naround 200,000 mt [to circa 396,000 nmt] from our January forecast, taking into naccount the lackluster state of demand nfrom China, and other consumers, in the nfirst few months of 2011.” However, he nsaid, “in looking at what has been the nmost significant impact on our evolving nview on copper supply and demand fun-ndamentals it has not been mine supply n(2011 mine supply has over the last fore-ncast period been reduced by 150,000-n200,000 mt), but the increase in scrap nsupply, which means that relative to nDecember, estimates of refined produc-ntion have increased by [circa] 120,000 nmt. This 300,000 [plus] mt swing, nbetween the implied reduction in refined ncopper from lower mine output versus ournlatest refined forecasts, points towards nthe sharp and steady improvement in nthe availability of copper scrap.” In the nbank’s view $10,000/mt copper is likely to keep purchases, even if in-line with nsales, at a “very modest pace.” However, nthe bank is still forecasting a 2011 year-nend price of $10,000/mt. This is based non a variety of macro and micro issues nincluding a weaker dollar. “But the key nin the near term is that copper needs nto pull back deep enough to re-engage nthe physical consumer with the physi-ncal seller. At $10,000 copper this just nwont happen. It is our view that copper nwill trade under $9,000 through Q2 at nvarious points (averaging $9,350 in Q2) nand this will be deep enough to trigger a ndemand recovery.”