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Dec. 13 (Bloomberg) -- Copper analysts are bullish for a fourth week on mounting concern that available supplies are dwindling amid faster economic growth.
Ten analysts surveyed by Bloomberg News expect prices to gain next week, five are bearish and five neutral. Copper reached a five-week high yesterday and London Metal Exchange- monitored stockpiles accessible for withdrawal fell this week to the lowest level in more than five years.
Copper for immediate delivery now costs more than metal further out in the future. U.S. and euro-area manufacturing accelerated in November and China’s refined copper imports in October were the second-highest in the past six years. Barclays Plc, which in September forecast that supply would beat demand this year, now expects a shortage and cut last week its estimate for the glut in 2014 by 34 percent.
“This year’s surplus has more or less disappeared,” said Stephen Briggs, an analyst at BNP Paribas SA in London. “There is a question mark also therefore on the size of the surplus for next year. This is driven really by this remorseless decline in exchange stocks.”
Copper fell 8.5 percent to $7,260 a metric ton on the LME this year. The Standard & Poor’s GSCI gauge of 24 commodities declined 3.7 percent and the MSCI All-Country World Index of equities gained 15 percent. The Bloomberg U.S. Treasury Bond Index lost 2.9 percent.
China imported 292,620 tons of refined copper in October, 60 percent more than in April and the second-highest amount for October since at least 2008, customs data show. Global inventories tracked by bourses in London, New York and Shanghai slid 41 percent since June to 551,745 tons, the smallest this year. On-warrant LME stockpiles fell to the lowest since August 2008 on Dec. 11, data from the biggest metals exchange show.
“Sentiment is shifting into positive mood,” said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt. “It does look like a relatively tight supply-demand situation. We will get a surplus next year, but probably lower than expected.”
Copper for immediate delivery on the LME is more costly than all contracts through December 2023, putting the market into backwardation. The phenomenon flipped from contango, where metal is cheaper today than later, this month. Immediate- delivery copper was $8 a ton more costly than the contract for delivery in three months today, after settling yesterday at the highest since July 2012.
An index of the six main LME metals was at a five-week high on Dec. 11 as Indonesia plans a ban on shipments of mineral ores from Jan. 12. Production at PT Freeport Indonesia’s Grasberg copper mine, the world’s second-largest, may fall to 30 percent to 40 percent of maximum output, the company said Dec. 6. Workers at Codelco’s Chuquicamata smelter in Chile went on strike Dec. 3 over bonuses. The company is the biggest copper producer.
While Barclays expects consumption to climb 3.8 percent next year, mine starts and expansions from Peru to Mongolia will boost production by 4.8 percent, resulting in an oversupply of 127,000 tons. The bank forecast the glut at 272,000 tons in September and 193,000 tons in October. Codelco said in October it plans to invest $4 billion to $5 billion annually in the next five years to boost output.
Demand may be weaker than expected and the Federal Reserve is debating whether the economy is strengthening enough to cut back stimulus that helped copper more than triple from December 2008 to February 2011. Expansion in China, the biggest metals user, will slow to 7.5 percent next year, the least since 1990, economist estimates compiled by Bloomberg show.
Money managers and other speculators have bet on lower prices since mid-November and the net-short position totaled 19,316 futures and options in the week to Dec. 3, U.S. Commodity Futures Trading Commission data show. Total short bets almost tripled since October.
The size of the bearish position could lead to more price gains if investors start closing out those bets, Deutsche Bank AG and Commerzbank AG said in reports this week. While the metal climbed two days ago above its 200-day moving average for the first time since March, it’s trading 29 percent below a record $10,190 set in February 2011.
Eight of 14 people surveyed expect raw sugar to fall next week and four are bullish. The commodity lost 17 percent to 16.28 cents a pound on ICE Futures U.S. in New York this year.
Thirteen of 28 people surveyed anticipate lower corn prices and seven said the grain will rise, while 13 of 28 said soybeans will fall and eight expect higher prices. Fifteen predicted losses in wheat and six were bullish.
Corn fell 38 percent to $4.34 a bushel this year in Chicago. Soybeans slid 6.1 percent to $13.2325 a bushel, as wheat declined 18 percent to $6.3425 a bushel.
Thirteen of 32 surveyed said gold will advance next week, 12 were bearish and seven neutral. The metal slumped 27 percent to $1,227.41 an ounce in London this year, set for the first annual decline in 13 years as some investors lost faith in bullion as a store of value.
While the S&P GSCI gauge of raw materials rose as much as 4.9 percent since Nov. 7, commodities will probably lag behind gains in equities in the short term because of overcapacity, ING Investment Management International said in a report e-mailed Dec. 10. Supply will beat demand for aluminum, copper, nickel and zinc in the first quarter of next year, Barclays estimates.
“Demand will probably pick up as the global economic recovery gathers momentum, but we don’t think that this will be enough to offset the spare capacity in the system,” said Tom Pugh, a commodities economist at Capital Economics Ltd. in London. “We doubt that the rebound we’ve seen in the last month or so will be particularly sustained.”
Gold survey results: Bullish: 13 Bearish: 12 Hold: 7
Copper survey results: Bullish: 10 Bearish: 5 Hold: 5
Corn survey results: Bullish: 7 Bearish: 13 Hold: 8
Soybean survey results: Bullish: 8 Bearish: 13 Hold: 7
Wheat survey results: Bullish: 6 Bearish: 15 Hold: 4
Raw sugar survey results: Bullish: 4 Bearish: 8 Hold: 2
White sugar survey results: Bullish: 4 Bearish: 7 Hold: 3
White sugar premium results: Widen: 4 Narrow: 4 Neutral: 6
--Editors: Claudia Carpenter, John Deane