Copper prices will advance 7.6 percent in 2013 from last year as demand in China, the U.S. and even Europe is forecast to rise amid a supply deficit for the metal, according to Morgan Stanley.
The bank projected copper prices to rise to $8,554 a metric ton, or $3.88 a pound, in 2013 from $7,952 a ton in 2012, analysts Peter Richardson and Joel Crane wrote in a report today. They forecast the price to decline to $8,157 a ton in 2014 and $7,496 in 2015.
Morgan Stanley raised its Chinese copper demand forecast to 8.4 percent year-on-year from 6.7 percent and expected further 5 percent growth in 2014. The bank forecast U.S. construction and auto manufacturing to be supportive for copper demand and Europe’s economy to see a moderate rebound in the second half of 2013.
“China’s industrial production cycle turned up in the fourth quarter of 2012, with infrastructure-related demand and non-ferrous metal output contributing strongly to increased output and higher orders,” the analysts said. “We believe this improved position will strengthen further in 2013, particularly as widespread industry destocking of finished products appears to be ending.”
Global demand will exceed supply by 17,000 tons in 2013, the fourth straight annual deficit, it said. The market had a 45,000-ton deficit in 2012.
Copper for three-month delivery fell 0.4 percent to $8,103 a ton on the London Metal Exchange yesterday.
Morgan Stanley projected LME cash aluminum price to average at $2,221 a ton in 2013 compared with $2,052 in 2012, lead to average at 2,353 a ton versus 2,073, nickel to average at 18,050 a ton versus 17,584, tin to average at 24,333 a ton versus 21,103 and zinc to average 2,155 a ton versus 1,965.