Demand for copper has increased recently as economies have been recovering. Barclays Capital has forecast a likely shortfall of supply. This is despite the fact that China has recently been growing at a slightly slower pace. Based on Barclays data, the usage of copper is China (40%), North America (11%), and Japan (5%). For the first time in a year, the IMF has raised their forecast for global growth potential.
This demand has been exacerbated by the recent positive German business confidence numbers. However, Goldman Sachs has predicted that China is likely to tap local reserves in the near future and thus decrease imports, which should place downward pressure on copper prices. As well, bourse data shows that supply may also be limited by inventory ownership.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.