Market low price projections for copper and Goldman Sachs expected value under U.S. $ 3 in 2014
Credit Suisse, Morgan Stanley and Deutsche Bank also adjusted its calculations to signs of slowdown and credit tight in China
The growing uncertainty about growth in China, the largest consumer of raw materials in the world, is changing the projections scenario for the average price of copper, the main export of the Chilean economy. Yesterday, several investment banks reduced their calculations, including estimating a value below $ 3 a pound for 2014.
Goldman Sachs, one of the most influential financial institutions in the commodity market analysis, lowered its average target of copper to 5.2% for 2013 to U.S. $ 3.27 a pound from U.S. $ 3.45 formerly portended. For next year, the company cut its forecast of U.S. $ 3.15 to U.S. $ 2.99 a pound.
Furthermore, Credit Suisse lowered its estimate for this year from U.S. $ 3.39 to U.S. $ 3.28, while Deutsche Bank did 4% to U.S. $ 3.42 a pound.
Adjustments were also seen in the projections of Morgan Stanley, which adjusted its average price in 3% this year to U.S. $ 3.42 a pound. The calculation for 2014 decreased 2% to U.S. $ 3.53. While the average of analysts surveyed by Bloomberg fell from U.S. $ 3.52 in May to U.S. $ 3.41 in June its price forecast for 2013.
The figures contrast with the scenario closer to $ 4 a pound they saw some financial institutions in January. At that time the market was betting on a rebound in China-consumer of 41.6% of all copper in the world-after ending 2012 with a GDP increase of 7.8%.
However, during the last few months there have been several outbreaks of concern about the pace of expansion of the second world economy, which in June completed two months of contraction in its manufacturing sector.
Furthermore, in the Asian power the Bank of China (central bank) is taking a belligerent stance to face systemic risks and bubbles in the financial system, which would be reflected in credit restriction measures, rate hikes and liquidity management. This, say experts, would affect Chinese growth.
In 2013 the copper price has fallen 15%, and after rumors of a liquidity crisis in recent days in , pound of copper was to cost about U.S. $ 3 for the first time in three years. Yesterday, however, the ore was recovered 1.34% and closed at $ 3.05, although there is still opaque in its future outlook.
Goldman Sachs warned and after lowering its Chinese GDP growth target for this year from 7.8 to 7.4% – the expected dynamism in the “Asian giant” could be lower than expected at the stage of “hardening of liquidity “in the financial market of the country
“These policies help foster a more sustainable growth in the medium term, but will test the tolerance of the Government to a cyclical downturn,” the group said.
The Chinese administration, headed by the Chinese premier, Li Keqiang, was planned in early 2013 a growth for this year of 7.5%. If the current economic slowdown in China stretches over the coming months, Li would be released as the first political leader to not meet its goal of annual GDP since the Asian crisis in 1998.
Source: El Mercurio
