In connection to the copper consumption growth and the reduction of its production the futures prices have gained 10% in value over the last month. According to GFMS “Copper Survey 2011” it is just the beginning of the copper deficit. According to the preliminary estimation it may reach 286K tons.
The main reasons for the deficit are believed to be growing demand and declining supply:
· China has been the main consumer of copper as it is expanding the local infrastructure.
· The mining companies have decreased to supplies
All these factors are the fundamental preconditions for the price growth
According to the Department of FMA_SAR of , strong movements eventually need pullbacks. Consequently, in mid-term perspective a technical pullback down to 4.34 is highly probable. If the price break and consolidates below the mentioned support level (4.34) the price may fall further down to 4.18. However, a break above the local high at 4.53 will shift the resistance level to 4.65.
