The rising cycle of bulk non-ferrous metals continues. As of the close of last week, the main contract of Shanghai copper stood at a high of 80,170 yuan/ton, setting a new high since 2006. International copper prices are getting closer and closer to the US$10,000 mark. LME copper futures prices continued to rise after opening on Monday, reaching a maximum of $9,988, continuing to hit a high in the past two years and just one step away from the $10,000 mark.
At the same time, international gold futures prices also hit a record high. New York gold futures closed at US$2,406.7/ounce last Friday and settled at US$2,413.8/ounce, both hitting record highs and rising by 1.97% in a week. Silver futures prices also rose further, with a settlement price of $28.84 per ounce on April 19, a cumulative increase of 2.77% in a week.
The analysis pointed out that one of the key factors affecting the trend of copper prices is the relationship between supply and demand. There are currently multiple disturbance events on the supply side. In April, the copper output of Codelco, the world’s largest copper supplier, fell. This is mainly due to the mining accident in March. Its Radomiro Tomic mine suspended most mining activities and output fell to a 20-year low. It is expected that the mine will gradually resume normal operations by early May.
On April 16, Vale said that a local court in Brazil had once again suspended the operating license of its Sossego copper mine. The mine produced 66,800 tons of copper last year, making it Vale’s second-largest copper mine.
In addition, Zambia, an important copper producer in the world, has experienced rolling blackouts due to ongoing drought. Zambia’s National Power Company said it plans to require mining companies to cut electricity demand by up to one-fifth. Zambia’s state power company has issued force majeure notices to some mines, “which could put additional pressure on the tight copper market”.
Previously, the First Quantum giant Cobre Panama copper mine was ordered by the Panamanian government to cease operations. The mining company’s copper production accounts for 1.5% of the world; Anglo American announced that it would reduce the production of its South American flagship copper business, etc.
The Yangtze River Nonferrous Metals Network once pointed out that with the gradual consumption of global mineral resources and the increasing difficulty of mining, the number of high-quality copper mines is continuously decreasing, which makes the smelting end face many difficulties in increasing production.
In addition, geopolitical factors are also affecting copper prices. According to the official website of the British government, on April 12, the U.S. Treasury Department coordinated with the United Kingdom to issue two new bans, prohibiting metal exchanges such as the London Metal Exchange (LME) and the Chicago Mercantile Exchange (CME) from accepting newly produced aluminum and aluminum from Russia. Copper and Nickel. The move is aimed at stemming Russia’s revenue from exports of aluminum, copper and nickel.
In the LME copper warehouse, copper from Russia accounts for a high proportion. The monthly metal inventory report released by the LME shows that in January this year, copper inventories originating in Russia were 54,800 tons, accounting for 46.48% of the total inventory of 117,900 tons; in February, Russian copper inventories were 53,600 tons, accounting for 46.48% of the total inventory. 51.6% of 103,800 tons; Russian copper inventory in March was 60,000 tons, accounting for 62.13% of copper inventory of 97,800 tons.
In fact, the tight supply pressure in the copper industry chain has lasted for several months. Currently, domestic and foreign research institutions are generally optimistic about price expectations for gold, copper and other resource products.
CICC predicts that passive production cuts by copper smelters may be the focus of the copper market in the second half of 2024 and 2025, and the scale of production cuts may expand. Depending on copper ore processing fees and sulfuric acid prices, copper smelters may be at risk of losing money. If Panama’s copper mines remain closed, Indonesia’s export ban is implemented, and the long-term copper concentrate price falls significantly below the smelter’s breakeven line, domestic smelter production cuts may expand, and copper prices are expected to hit a record high of US$11,000/ton.
Citigroup recently stated that under basic conditions, copper prices are expected to reach US$10,000/ton in the fourth quarter of 2024 and reach US$12,000/ton in 2026. “Copper prices are expected to rise to US$14,500/ton.” Wang Zhaohua, an analyst at Everbright Securities Research Institute, believes that the current copper industry is in tight supply and demand in the downstream sector exceeds expectations. Copper prices have entered a very high price-demand elasticity zone, with subtle demand The changes will bring about a rapid jump in copper prices. The copper industry will enter a shortage in 2024, and the shortage will further expand in 2025, and is theoretically expected to rise to US$14,500/ton.
Snowdon, a strategist at Goldman Sachs Group, believes that copper’s latest rise is just “a small step before it becomes Mount Everest” and that there will be a “very serious” gap in refined copper supply. He predicts that the average price next year will reach a staggering US$15,000 per ton. As for gold, Goldman Sachs Group even called it an “unshakable bull market” and raised its year-end price target to $2,700 per ounce.
“Futures Daily” quoted Yide Futures analysts as saying that the current macro sentiment in the copper market is overheated and this market situation needs to be treated with caution. In the second quarter, the macro and fundamentals are supported by a bullish resonance, and copper prices are likely to rise further; however, both macro and fundamentals will face a reality test, and there may be differences in expectations. Once reality falls short of expectations, copper prices are at risk of a correction.
Comprehensive report from Beijing Business Daily
(Editor: Wen Jing)
Tags: Nonferrous metals bull market Copper prices hit #18year high gold futures prices hit record high_Futures_Financial Channel Home_Financial NetworkCAIJING .COM.CN
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