Morgan Stanley Copper Price Prediction

The price of copper has recovered from its sharp drop earlier in the year, climbing more than 6 percent in the past month. However, Morgan Stanley cut its 2015 metal price forecast by about 16 percent to $ 5,945 a tonne amid weak demand from China.

Morgan Stanley experts remain convinced that base metals will not suffer the same fate as bulk commodities such as coal, but the report expresses concern that seasonal demand in China has failed to improve the situation as expected. In the report, analysts say the Chinese government has approved expansion of infrastructure projects and has left metal processing "dormant." In addition, Morgan Stanley is not alone in this belief, the Financial Times also pointed to the lack of strong demand earlier this month and noted that imports fell in February to their lowest level since 2011.

However, Morgan Stanley notes that the red metal is slowly recovering from the largest drop in all major metals during the last quarter of 2014 in response to changes in crude oil prices. "Over the past three months, there have been signs that" the short-term outlook for copper has actually improved slightly. "

At the same time, the firm emphasizes in the report that the market will wait and watch what happens to copper demand from China when it comes to forecasting the movement of copper prices. That said, Morgan Stanley notes that China recently announced a 21 percent year-on-year increase in investment, raising hopes for higher spending.