Seven out of 13 analysts believe copper prices will drop next week due to plentiful inventories and a wider discount for scrap, according to a Bloomberg survey.
However, six of the analysts predicted it would go up.
As of yesterday, stockpiles tracked by the LME rose 36 per cent from the 2010 low seen in December. Bloomberg reports that Utah Metal Works president Mark Lewon said that scrap copper is trading at a discount of 60 cents a pound against New York prices for virgin material. That compares with 39 to 40 cents last week.
He said that demand is weak and that China is only buying limited amounts of scrap. He added: “This is a clear indication that there is no shortage of copper out there.”
With it appearing that the euro debt crisis could be closer to a resolution, the weakening numbers of the HSBC purchasing managers index on Chinese manufacturing, as reported by scrap-ex news yesterday, continued to influence the market.
MF Global analyst Edward Meir said: “The Chinese numbers were very negative, and that’s what is keeping metals subdued.”
Copper dropped below the £6,000 mark again yesterday, with the 3-month price dropping to $9,630 (£5,953) compared to £9,788 (£6,065) on Wednesday.
Aluminium was also down settling at $2,503 (£1,547) on Thursday after finishing at $2,548 (£1,579) a day earlier.
Lead was at $2,689 (£1,662) compared to $2,740 (£1,698) on Wednesday. Nickel inventories are down to their lowest levels since March 2009 on the LME to 101,574 tonnes. As a result, nickel closed at $23,750 (£14,683) down from $23,950 (£14,842) as there appears less demand for the metal at present.
Tin settled at $27,970 (£17,292) compared to $27,875 (£17,275) on Wednesday. Zinc traded at $2,440 (£1,508) compared to $2,461 (£1,525) the previous day.
Stainless steel finished at £585 (£362) up slightly from Wednesday’s £580 (£359).