Bold Prediction of $4 Copper May Be Premature

Implications: The fp trading desk has made a bold prediction on short term copper prices which expects a price increase of 20% in a matter of one or two months. Their use of recent historic economic data does not tell the whole story.

Analysis:  

The author of this article published in the FP trading desk has made a bold prediction for the short term outlook of the copper price based solely on consumption from China.

What is interesting in this prediction is the missing information with regard to import problems at the Chinese docks which have slowed up orders and receipts of goods to a standstill.

Chinese custom officers have been working off a backlog of approximately 20,000 containers of copper and copper bearing products (as of Aug 10, 2007), as well as an unspecified number of other containers, assumed to be many multiples greater than this amount. For this reason, many, if not most metal importers have been unable to issue orders for Chinese delivery.

Only after there appears to be an easing in this situation as well as other reasons the Chinese government has chosen to slow the growth of their economy will we see a pickup in the volume of business.