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Tom Stundza, Executive Editor -- Purchasing, 7/17/2003 6:00:00 AM
Purchases of copper and brass mill products from processing distributors, so far, are only slightly better this year than in 2002. That was when the full-year total of 350 million lb was the smallest amount bought since the 316 million lb in 1991. In other words, metal demand from the manufacturing sector has stayed flat over the last 18 months, which has weighed on the New York Commodity Exchange (Comex) price. Spot copper cathode was 84¢/lb in 2000 but slipped to an average 72.5¢ in 2001-2002 and recovered to only 75¢ in the first five months of 2003. Total shipments of copper and copper alloy products haven't really improved yet—and probably won't until the nation's manufacturing malaise dissolves. Still, taking a longer view, Morgan Stanley analyst Wayne Atwell has raised his 2006 copper price target to $1.05/lb from his earlier forecast of 85¢. He believes the supply-and-demand picture for copper "will improve materially" within the next three to four years. That's why Atwell expects global copper consumption growth to average 2.7%. Also, he says world copper inventory peaked in April of 2002—and numerous smelting cutbacks are in place—so there's likely be a supply deficit during the next three years.
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