Tsuen Wan International: Strong 2nd half recovery expected for copper and tin – Barclays.

July 11, 2011 - PRLog -- Barclays has informed Tsuen Wan International that from the fundamentals position the supply side is shaping a more diverse picture across the base metals, and they expect this to lead to increasingly divergent price performances.

“We remain positive on copper and tin, and we expect these metals to recover strongly in H2 11. In the case of copper, we forecast weak mine supply growth this year with a risk of contraction due to an array of challenges reinforced by recent widespread disruptions at facilities.”


An increase in Chinese imports is the catalyst needed to take prices significantly higher and the draws in bonded warehouse stocks suggest to us this is an imminent effect. Aluminum prices remain well firm as a result of strong global demand growth, energy-led cost inflation as well as from expectations of tightening long-term energy availability. In addition, the threat to Chinese production growth from power rationing increases upside risk.


Macro concerns continue to dominate price action, although apparent progress in tackling the Greek debt crisis has offered the basis for a short-term relief rally across the complex.


For lead, Barclays told Tsuen Wan International that they expect the indefinite closure again of the world’s largest lead mine, Magellan, to provide support and for Chinese conditions to firm once battery manufacturing plants restart production after the seasonal slowdown.

“We are neutral on nickel with the view that recent price weakness is overdone, but that recovering production will ease market tightness and lead to a moderate build in LME stocks. Zinc remains our least favored metal, with continued deterioration in the fundamentals with big stock builds, a growing market surplus and sustained production growth,” Barclays informed Tsuen Wan International.

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