The biggest slump in copper inventories in six years is compounding shortages as prices head toward record highs, making the metal a top pick for Goldman Sachs Group Inc. and Morgan Stanley. Demand will outpace supply by 367,500 metric tons next year, enough for wires, pipes and appliances in about 1.8 million U.S. homes, according to the median forecast of 12 analysts surveyed by Bloomberg. Stockpiles may drop to an all- time low of less than one week’s usage, said Michael Widmer, a London-based metals analyst at Bank of America Merrill Lynch. Global exchange inventories have dropped 22 percent this year, heading for the largest slide since 2004, data compiled by Bloomberg show.
Prices advanced 35 percent since June 30 even as the International Monetary Fund predicted slower world growth, U.S. unemployment stuck near its highest level in more than a quarter century and China, which uses two in every five tons of copper, curbed lending and raised interest rates. Now, banks from Credit Suisse Group to Barclays Capital are predicting higher prices, with the median in the Bloomberg survey at a record average of $8,542 a ton for 2011, 15 percent more than this year. (more)
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