The worldwide glut of copper supply is poised to almost triple in 2014, driving prices to the lowest in at least three years at a time when the International Monetary Fund says economic growth will be weaker than forecast.
Carmakers from Ford Motor Co. to Audi AG and Jaguar Land Rover Plc are using record amounts of aluminum to replace heavier steel, providing relief to producers of the metal confronting excess supplies and depressed prices.
Demand for lead in Japan, the third-biggest economy, is set to climb as the country seeks batteries and generators to help it recover from the destruction caused by its strongest earthquake on record and tsunami.
The proposed additional delivery requirement at warehouses monitored by the London Metal Exchange should help limit the potential for spikes in metal premiums caused by long wait times at some locations, according to Barclays Plc.
Copper supplies relative to demand will fall to a four-year low as operating glitches, labor shortages and declining ore-grade quality cut mine supplies, boosting prospects for a price rebound, Barclays Capital said.