Copper prices may lead a number of commodities in a rally into the next year due to a combination of growing consumption cutting into available supplies and increased demand from investors looking for a haven amid declining currency values, according to Peter Richardson, chief metals economist with Morgan Stanley Australia Ltd., in an interview with Bloomberg reporter Glenys Sim.
“There is a fundamental aspect to this rally in addition to what's happening to the U.S. dollar,” Peter Richardson, chief metals economist at Morgan Stanley Australia Ltd., said in an interview. “I rank copper first,” said Richardson, who's studied metals for almost 20 years. He also backed tin, which touched a record yesterday, and nickel, up 32 percent this year.Copper has surged this year, trading within 1 percent of a record yesterday, as the global economy recovered from the worst recession since World War II and the dollar fell. Refined-copper output will lag behind demand next year for the first time since 2007, the International Copper Study Group has said.
Copper, used to make pipes and wires, has the “potential to have a structural shortage of supply for longer than any of the other metals,” Richardson said yesterday. There's been underinvestment in mine capacity over the past decade and a “significant problem” of declining ore quality, he said.
The article further notes that Goldman Sachs Group analysts expect copper to trade at $11,000 per ton in a year.