Copper set to touch $4500 on LME

Copper prices are expected to touch $4500 a tonne on the London Metal Exchange (LME) by the current year end, according to V K Sinha, regional head, south, Hindustan Copper Limited.

"Suppliers need not to worry till warehouse stocks reaches 100,000 tonne. Hence, the current supply tightness would pull prices up," Sinha said.

"The current price volatility would continue and anytime, before September-end, the price may touch $4300 a tonne," he said adding that before the December break prices would mount to an all-time high of $4500 and then start declining.

Once it starts declining it may reach any level, he added. On the expansion in capacities by leading producers around the globe, including India, Sinha said it was not going to make any significant impact on overall supply of copper as demand was growing proportionately as well.

India is currently producing every year approximately 4,50,000 tonne of copper, of which Hindustan Copper contributes around 35,000 tonne.

However, all are not too bullish about the prices. Contradicting Sinha's views, Rohit Shah, president of the Bombay Metal Exchange, said copper would slide by $3500 a tonne by that time as those mines, which had closed when prices moved south, are in operation now and a flood of supply is anticipated any time soon. Hence, prices may come down.

"There is no absolute physical buying today. Financial institutions and speculators are playing big roles to boost copper price to this level. China is no longer holding sway on heavy global demand for metals. Hence, prices have to come down," he added.

"Small smelters are suffering badly today as they cannot supply the metal at the negotiated price. At the time of delivery, they can see the price difference from that at mutual negotiations."

Surendra Mardia, senior vice-president, Bombay Metal Exchange, said prices would rule between $3850 and $3750. By January, it would decline up to $3500, he added.