Copper prices will decline in 1998 as supply rises by six per cent but they will remain volatile until stocks surmount the 5.5-week consumption level late in theyear,broker Rudolf Wolff said on Tuesday.
Three month LME prices are forecast to average $1,950 per tonne next year after $2,342 so far in 1997, the broker said in a report for LME Week.
Output is expected to increase by six per cent next year, fuelled by a 20 per cent rise in SX-EW production, primarily in South America.
The anticipated growth in production is expected to swing the western worlds copper market from a supply deficit to surplus for the remainder of the century, the report said.
Consumption is seen rising by 3.5 per cent, mainly due to continued growth in the United states as well as recovery in Europe and Japan.
