Stating that they are Copper bears, a latest report by investment bank UBS forecasts that copper prices will drop below $6000/tonne over the next couple of years.
We are copper bears. “We forecast a steady decline from the current price of $8400/t, to an average of $8,000 for 2012, $7,055 in 2013, and $5,840 in 2014”. A drop from $8400 to $5840 is essentially a decline of 30% within 2 years.
UBS argues that copper prices have not averaged $8500/tone in any quarter over the past few years unless there was a Quantitative Easing from the US. As since the possibility of further QE from the US is diminishing, UBS does not see copper prices nearing $9000/tonne in the coming months.
A recent Barclays report, on the contrary, makes an opposite forecast. Barclays sees copper prices surging to $9300/tonne during the last quarter of 2012.
Source: Commodity Online