Analyst: Copper stockpiles declining in China

Goldman Sachs, a leading financial powerhouse, said last week that investments in commodities would produce a +29% return over the coming year, “led by energy and industrial-metals investments,” according to Bloomberg wire report

Favored performers for investors through next June include crude, natural gas, copper, aluminum and gold. “Copper stockpiles are declining, especially in leading global consumer China,” a Goldman analyst wrote.

Related story: Copper prices are falling—will it last forever?

A separate Goldman Sachs forecast—for three-month prices—cut the outlook for copper prices in the short term by 11%. That would cut the price from $4.08/pound to $3.63.

Additionally, BloombergTV’s Tom Keene asked Donald Straszheim, senior managing director and head of China research at ISI Group, about copper’s prospects in China. Straszheim said, “It is in the near-term just a correction. But in the loner term, commodity demand is not going to rise nearly as rapidly in China as it has in the past.”

“If [annual Chinese GDP] growth goes from 10% to 6%,” Straszheim continued, “what do you think is going to happen to Steel, which has been growing at 16% a year for the last decade? It is going to go down.”

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