According to financial services firm Barclays, demand for the red metal will outpace supply by around 316,000 metric tonnes in the first six months of 2013, but the bank added that in the second quarter of the year it expects a surplus to emerge.
Bloomberg conducted a survey of analysts and traders and found that they expected prices to average $8,300 a tonne in the second quarter of the year, some 6.4% higher than it is currently.
The reason behind this increase in demand, according to analysts, is China’s thirst for the metal for the massive infrastructure projects it has planned to begin next year, which include 2,000 kilometers (1,250 miles) of roads, subway projects in 18 cities and extra spending on railways.
Dominic Schnider, Singapore-based global head of non-traditional assets at UBS AG’s wealth-management unit told Bloomberg that: “Economic activity doesn’t have to be that strong in China for inventories to get drawn down and you could see a rally in the first half, but then you come into the second half where mine supply comes in on the strong side.”
