Goldman Sachs commodities analysts think that copper could be the best bet among industrial metals in 2013, they write in a research note today.
Copper is still our preferred base metal as we head into 2013. Its high exposure to continued strength in late cycle Chinese construction completions (c.50% of Chinese consumption), together with an anticipated rebound in underperforming sectors in China (consumer appliances, manufacturing, machinery) and a pick-up in ex-Chinese consumption (US housing, general EM activity) are expected to underpin copper consumption growth through mid-late 2013.
Copper prices are typically viewed as a key barometer of global industrial activity, given how widely the metal is used in products like the pipes and wiring in new houses. Year-to-date copper prices haven’t done a whole lot—they’re up about 7%. But they’ve recently shot higher on hope that the worst of China’s slowdown may be behind us. Here’s a look.