Morgan Stanley hikes copper price view on China
* Near term price pullback will reverse
* Raises 2009 forecast to $2.14 per lb, 2010 to $2.50
* China's economic recovery will widen and deepen
LONDON, July 3 (Reuters) - Morgan Stanley (MS.N: Quote, Profile, Research) has hiked its 2009 and 2010 copper price forecasts, partly because of a strong recovery in China, the world's largest consumer of the metal used in power and constrution.
The bank raised its 2009 copper price forecast by 48 percent to $2.14 per lb from $1.45 previously. For next year, the forecast was raised 52 percent to $2.50 per lb.
"Demand from China for strategic reserve purposes and commercial restocking has been a main driver of price support," Morgan Stanley said.
"This is consistent with a view that stimulus packages and easing access to credit are encouraging demand."
In the near term, however, there was a risk that an end to Chinese restocking and a seasonal lull in demand will contribute to a price correction. Continued...
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