Marketplace data from the International Copper Study Group shows global purchasing continuing to decline this year while global smelting continues to increase. "It's a tough environment for copper," says analyst Victor Lazarovici at BMO Nesbitt Burns in New York, noting that new supply is on pace to beat demand by about 850,000 metric tons. Some analysts believe it won't be that large because they expect some fourth quarter cutbacks in smelting and refining. Still, their consensus forecast for the London Metal Exchange (LME) spot price average is 71¢/lb for this year. Last year, when supply outpaced demand by closer to 750,000 metric tons, LME copper averaged 72¢. "The market is caught in a quagmire of uncertainty," says analyst John E. Gross in Huntington, N.Y. Reason: Back in 2000, when LME copper averaged 82¢, demand outran supply by almost 450,000 metric tons. "Without a huge economic recovery, the copper supply sector will continue to struggle with low prices," says Lazarovici. However, the consensus forecast for LME copper next year is 77¢/lb. That would require near equilibrium in supply and demand. A new (early October) marketplace forecast suggests supply still will be ahead of demand by 145,000 metric tons.

stundza@reedbusiness.com