* Reiterates $9,000/T six-month price forecast
* Sees market moving from oversupply to balance
* Says recent selloff was overdone
NEW YORK, March 1 U.S. investment bank Goldman
Sachs recommended buying September copper futures on the
London Metal Exchange, in a note released on Friday, on
expectations of a pickup in Chinese demand over the next three
to six months.
The influential U.S. bank prefers copper for 2013 among the
base metals and has a six-month price forecast as high as
Three-month copper on the London Metal Exchange (LME)
was untraded at the close on Friday but last bid at
$7,700 per tonne.
"Fundamentally, we see the copper market in small surplus,
moving towards balance," Goldman Sachs analyst Max Layton said
in the research note.
"We expect Chinese refined copper imports to pick up over
the next three-six months and Chinese bonded stocks to draw, as
Chinese demand picks up both seasonally and following continued
growth in construction completions, property sales, and power
infrastructure related demand."
After a rally in the last part of 2012 and the beginning of
2013, copper has fallen sharply in the last couple of weeks,
together with other commodity and equity markets, in a broader
The U.S. bank, however, thinks the selloff was overdone and
now offers a good opportunity to establish a September copper
long position at around $7,700, with a 17 percent potential
upside to the bank's $9,000-per-tonne six-month forecast.
"For metals, fears over Chinese property tightening,
concerns over broader economic tightening, and a
weaker-than-anticipated PMI (purchasing managers' index) all
contributed to the liquidation," Layton added in the note.
"Beyond the February Chinese economic data, we expect the
Chinese economic and metal-specific data to show year-on-year
growth," the note said.