merrill lynch

1057 [Dow Jones] Merrill Lynch says price drivers for copper, other metals lack substance, with copper swept up by buying frenzy in broader global equity markets. Copper up 74% since December 2008 low, around $2.20/lb, ($4,848/ton on LME) highest level in two quarters; "problem is, we believe that not much has changed in copper's fundamentals to justify this lift." China restocking for more than six months now, copper inventory levels high, albeit stable and not rising; demand growth ex-China still insipid. Expects copper to stop rising in May due to expected seasonally-weak buying in China, only buyer of size right now; China typically buys most of its raw materials in first two quarters of calendar year. "As China is the biggest demand-side player in copper's desperately weak global market, this event may prove to be a powerful bear signal." Expects $1.50 to act as floor price. Stocks affected include Freeport McMoRan (FCX), Grupo Mexico (GMEXICO.MX), Antofagasta (ANTO.LN), Newcrest Mining (NCM.AU).(EFB)