GFMS sees 245,000 tonne copper surplus ahead.

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    LONDON -

    In the latest edition of GFMS' Base Metals Forecasting Monthly the specialist analysts make some interesting observations with regard to the copper sector. They feel that market sentiment has been very positive but are not so confident in the short term price prospects for the metal, although perhaps structurally sound in the medium term.

    At the beginning of the current month the price topped $6,000/tonne for the first time this year and has risen currently over $6,100, with the price being underpinned by concerns over a tight supply conditions.

    But, GFMS notes, LME stocks have been rising, although still only account for about one week's Western World consumption.

    Be this as it may, GFMS is concerned that continuing copper consumption declines look like they may more than offset by production losses through the remainder of the year and that if this becomes apparent to investors and purchasers we could see a short-term sharp drop in the copper price during the next few weeks. GFMS mentions a fall to as little as $5,000/tonne as a possibility.

    But, the consultancy sees consumption beginning to recover during the fourth quarter and, once this becomes apparent prices are likely to bounce back and a price of as high as $6,500/tonne or more is felt not to be out of the question.

    The monthly publication is a subscription service designed to give ongoing price forecasts for base metals and, as such, is predicting a price range of between $5,000 and $6,500/tonne for copper over the four months from October to November.;sn=Detail

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