2012 Copper Q2 Market Trends and Outlook-1

Copper took a beating in the second quarter, falling over 9 percent from the previous quarter as global worries about Europe's sovereign debt crisis continued to rise. The red metal did, however, bounce back from its 2012 low at the end of June when European leaders agreed to give Eurozone nations easier access to emergency funds. These factors, together with hopes for greater economic stimulus from China and steady gains in US growth, are keeping analysts broadly upbeat about copper's outlook.diamond beneficiation equipment
Copper reached its year-to-date low of $3.26 a pound in early June as worries about the spillover effects of a financial meltdown not only in Greece, but also in Spain and Italy, escalated. In addition, the first rate cut by China's central bank since 2008 sparked worries that the Chinese economy is more vulnerable than expected. Yet copper enjoyed its biggest one-day rally in seven months on the last trading day of the quarter, gaining over 4 percent on news of the latest European deal, which will help banks recapitalize by giving them direct access to bailout funds from the European Stability Mechanism.
hot sale gold mining equipmentChinese rate cut, mixed bag of US data
While the People's Bank of China's decision to cut its benchmark one-year deposit rate by 0.25 percentage points to 3.25 percent in early June was expected, the first rate cut since 2008 nonetheless initially struck fear in the hearts of many analysts who worried that the state of the Chinese economy was worse than expected. Given that the country accounts for over 40 percent of global copper consumption, China's appetite for the red metal is a key price driver. Expectations have since improved in anticipation of Beijing taking measures to continue propping up any slack in continued growth.
In the United States, the Federal Reserve's decision to extend Operation Twist, its bond-buying program, was welcomed by commodities investors as the program lowers longer-term borrowing costs. Also on a positive note, a number of indicators suggest that the US economy is in better shape now than previously expected. This is particularly true for the housing sector; in May, single-family home sales rose 7.6 percent to reach a two-year high of 369,000 units. However, hopes that the Fed would introduce a new round of quantitative easing to jump start growth were quashed in the second quarter, and investors remain cautious about the US housing market and employment situation, especially as jobless claims still remain close to their 2012 high.hard rock mining equipment
Corporate developments
As commodities prices across the board slumped in the second quarter, BHP Billiton(ASX:BHP,NYSE:BHP,LSE:BLT) and Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO) said they would hold off approving mega-projects for the next few months as shareholders' disgruntlement over the mining giants' financial performance grew. JP Morgan expects BHP to delay the expansion of its $20 billion Olympic Dam copper and gold project for another three or four years. Analyst Lyndon Fagan stated in early June that "of all the major projects in the growth pipeline for BHP and Rio Tinto, the Olympic Dam expansion has the least attractive risk- return trade-off." Rio Tinto's CEO Tom Albanese said that he recognizes investors' need for better returns, but also stressed that the company needs to put money into its projects. Together, Rio Tinto and BHP Billiton are expected to account for about one-third of overall capital investment in the mining sector worldwide this year.