copper confusion

In today's Australian Business Section, Page 24, Robin Bromby writes under the heading 'Copper confusion' the following:

"INVESTORS are accustomed to variations in analyst predictions but diametrically opposed ones make for confusion.

View No 1: China, primed by government spending to boost growth, will need enough copper each month to circle the globe 100 times. According to Bloomberg, in December China used 4.2 million km of copper cables, enough to circle the Earth's equatorial circumference of 40,075km 105 times. The news service quotes John Stephenson at Totonto's First Asset Investment Management saying copper is the preferred way to play China growth because it is so import-dependent. Barclays agrees China will have a copper shortage while Xinhua reports three million rural homes will be rebuilt this year, all presumably with new copper cabling.

View No 2: Copper will fall from about $US7900/tonne now to $US7000/tonne by the end of the year, then to $US6000 next year. Ross Strachan at London's Capital Economics says global copper mine supply grew at its fastest rate in eight years in the closing months of last year, adding to stockpiles and dragging down prices.

The increased production has been driven by some of the world's largest mines. In the December quarter Chile's Escondida mined 31 per cent more year-on-year while West Papua Grasberg got output to about triple what it had been a year before when workers were on strike.

Then in June along will come the Oyu Tolgoi mine in Mongolia with another 450,00 tonnes a year of copper to add to the world market. To put that in perspective, the total inventory of copper in London Metal Exchange warehouses as at Tuesday this week was 430,375 tonnes (incidentally, a 52 week high)."

Can be very confusing out there for copper investors can't it? What impact with this have on CDU when it comes into FULL production in 2014? Anyone's guess, but it will have the product and has contracts for 60% already locked in. Time will tell aye?

Cheers