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REUTERS
November 8: World copper prices are vulnerable to further declines in coming months, Andrew Shaw, senior minerals analyst at Australian producer North Ltd, said. "With stated output cuts currently amounting to an annual 300,000 tonnes per year, prices are vulnerable to further falls," he told a Metal Bulletin conference in Beijing. But Shaw said the lower market would trigger more output cuts which would pull the market into deficit in the early years of the next century. "Ironically, the pervading gloom of today is probably sowing the seeds of cyclical shortage tomorrow," Shaw added. "History tells us that neither annual surplus nor annual deficit persist for more than four consecutive years." He said it did not seem credible that supply will run unchecked ahead of demand for many more years.
The increased use of copper wire in the home, work place and in transport is reflected in impressive growth in the United States and the information technology revolution is providing lasting support for consumption,he said. Any lasting output cutbacks could give rise to concern, Shaw said. Despite the current crisis, the rapid industrialisation of East Asia is likely to eventually resume, prompting fresh demand for copper in infrastructure, fabrication and construction.
"China is a key component of this activity and without doubt the region is the engine of growth for the new millennium," Shaw added. Meanwhile, a Chinese industry official said structural changes are imperative and inevitable in China's copper industry due to the grim scenario in its domestic market.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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