Despite a recent improvement in risk sentiment, copper prices are languishing. The commodity has fallen around 13% for the year and nearly 20% from its April peak. In part, that comes from a drop in copper imports to China. And China’s attempts to control inflation and property bubbles haven’t helped either. Add in double dip concerns about Europe and you get a very wary Wall Street. Bearish analysts have since forecasted further downward pressure on the commodity. But in focusing on just those facts, pessimists are missing out on the bigger picture. And the bigger picture shows a much more bullish outlook ahead.
Emerging nations demand for copper
Few people notice any other emerging nations but China these days. But contrary to popular belief, others do exist… and they need copper too. For instance, India’s state-run Hindustan Copper recently said, “India’s copper demand will likely grow by at least 7% in 2010-11, fed by the power sector.” Energy consultancy Platts adds that India suffers from a peak power deficit of over 12%. To cope, the country has begun tendering nine major power transmission projects. Worth $12.3 billion together, they only await the OK from regulatory authorities.... To read more, click here.
