MUMBAI (Commodity Online) By Geena Paul: Copper, the much sought after metal in the world had suffered a bit in 2009. But, things are changing now and 2010 will be a boom year for the metal if China continues its buying spree.
The strong rise in Chinese imports in 2009 led to the rally in copper prices last year. Some weakness may happen in Chinese demand in the first quarter of 2010 but then again from second quarter the demand could improve.
The refined copper market balance for 2009 is expected to show a surplus of about 370,000 metric tonnes. A decline in production will not be sufficient to overcome weakness in refined copper demand. For 2010, a larger surplus of around 540,000 tonne is expected to develop, as lower copper demand will encounter an increase in copper supply.
A recovery is expected in copper usage in most copper consuming countries for 2010, but lower industrial demand and partial drawdown of unreported inventories accumulated in 2009 is expected to reverse the growth in apparent usage in China and lead to an overall global decrease in usage of around 0.7%.
If you consider the technical analysis of some experts, copper prices have given around 130% returns in 2009. Prices took supports around 2850/2825 levels last year and bounced from there. From the current levels it looks like as long as $6600/mt holds support, prices may edge higher towards $7500/7600 levels.
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