Rising Tides in Copper Markets 2024

 

  • Copper prices are forecasted to increase by over 75% in the next two years due to supply disruptions and higher demand from the renewable energy sector.

 

  • The green energy transition and a potential decline in the U.S. dollar in the latter part of 2024 are anticipated to drive copper prices up, as per a report by BMI, a Fitch Solutions research unit.

 

  • Market expectations of rate cuts by the U.S. Federal Reserve are likely to weaken the dollar, making copper priced in dollars more appealing to international buyers.

 

  • Matty Zhao of Bank of America Securities optimistic about copper due to macroeconomic factors, including potential Fed rate cuts and a weakening U.S. dollar.

 

  • The COP28 climate change conference saw over 60 countries supporting a plan to triple global renewable energy capacity by 2030, a move that Citibank believes will significantly benefit copper.

 

  • Citibank's December report estimated that the increased renewable energy targets could lead to an additional 4.2 million tons of copper demand by 2030.

 

  • This surge in demand could potentially drive copper prices to $15,000 per ton by 2025, surpassing the previous record peak of $10,730 per ton reached in March of the previous year.

 

  • A growing economy typically results in increased demand for copper, a key component in electrical equipment and industrial machinery, making copper demand a reliable indicator of economic well-being.

 

  • The price of copper on the London Metal Exchange is currently $8,559 per ton.

 

  • Copper is a crucial component in the energy transition ecosystem and is used in the manufacturing of electric vehicles, power grids, and wind turbines.

 

  • Analysts predict a bullish run for copper due to mining disruptions, with Goldman Sachs expecting a deficit of over half a million tons in 2024.

 

  • First Quantum Minerals halted production at the Cobre Panamá, one of the world's largest copper mines, following a Supreme Court ruling and nationwide protests.

 

  • Anglo American, a major producer, plans to cut copper output in 2024 and 2025 to reduce costs.

 

  • Goldman Sachs analysts believe that the supply cuts will lead to a tightening of the copper market, with prices potentially reaching $10,000 per ton within the year and even higher in 2025.

 

  • Chile and Peru are expected to be the main beneficiaries of the copper rush, as they have significant reserves of copper and other green transition minerals. Chile holds approximately 21% of global copper reserves.

 

  • Goldman Sachs has increased its confidence that copper prices will rise to an average of $15,000 per ton by 2025.

 

  • S&P Global's Senior Copper Analyst, Wang Ruilin, predicts a supply shortage of copper concentrates for new smelters starting in 2024, with the deficits expected to deepen in 2025-27.

 

The current price of copper on the London Metal Exchange: "LME Copper Price," London Metal Exchange. LME Copper.

 

Projections on copper prices reaching new highs due to various factors including renewable energy demand: Tim Treadgold, "Copper Bulls Can See A Record Price Of $12,000/T," Forbes, April 3, 2024. Forbes Article.

  1. Analysis of factors contributing to the rise in copper and gold prices, including Federal Reserve's monetary policy: "Copper, Gold See Largest Price Boost From Fed Easing, Goldman Says," Reuters, February 21, 2024. Reuters Article.

  2. Fitch Solutions Report Highlights Economic and Geopolitical Impacts on Commodities," Fitch Solutions, March 21, 2024. Fitch Solutions Article.