Copper prices tend to take a dip in the summer months as demand dries up, but so far China's unprecedented stockpiling of the metal has seen copper buck that trend.
"Although we still expect weakness from current prices of $2.50 per pound, we have been far too conservative with our copper price forecasts," George Topping, mining analyst with Blackmont, said in a note Friday.
So far this year, the London Metal Exchange price for copper has averaged $1.93/lb, which exceeds Blackmont's forecasted $1.70/lb in 2009/2010 and $1.80/lb long-term.
"China has imported record quantities of refined copper as well as other metals, including zinc," he said. "We believe low prices, relative to last year, and an easy bank lending policy have spurred state and private stockpiling."
Imports of refined copper in June increased 12.5% to 383,627 tonnes, up about 400% on the year, Mr. Topping said.
The numbers suggest a $2.30/lb limit for China. Blackmont still expects the country to scale back from the 1.8 million tonnes that have been net imported in the first half of 2009 as companies turn to inventories, which should mute demand somewhat.
In any case, Mr. Topping has revised his pricing estimate for copper, raising to $2.05/lb in 2009 based on $2.25/lb pricing for the rest of the year. The 2010 and long-term forecast has been bumped up to $2.15/lb.