July 24, 2024

Berthascafephoenix

General Evolution

Copper prices — traditionally a barometer for the global economy — are expected to soar next year

Copper prices — traditionally a barometer for the global economy — are expected to soar next year

Sheets of copper cathode are pictured at BHP Billiton’s Escondida, the world’s biggest copper mine, in Antofagasta, northern Chile March 31, 2008.

Ivan Alvarado | Reuters

Copper — traditionally seen as a leading indicator of economic health — has unsurprisingly had a rough year. But analysts expect a resurgence in 2023, even as the global outlook remains highly uncertain.

Some of Wall Street’s biggest banks in recent weeks have suggested a combination of short-term supply tightness and long-term energy transition-related demand will push the red metal north from here.

The downward pressure in 2022 stemmed in part from persistent market expectations for a surplus inflection in the metal market, driven by anticipation of sluggish demand amid slowing global growth and an acceleration of mining activity, Goldman Sachs strategists said in a note last week.

However, this has not come to fruition, and Goldman highlighted that the cathode market has remained in a “clear deficit (GS estimate 210kt versus 131kt previously), with global visible stocks falling to their lowest level in 14 years,” metals strategist Nick Snowdown said.

“Equally important, the surplus we previously expected for 2023 (169kt surplus) has also now disappeared in our latest balance iteration (GSe 178kt deficit),” he added.

The metal — used in many sectors — has also endured a tough 2022 due to tighter U.S. monetary policy, the energy crisis arising from Russia’s war in Ukraine and China’s combination of strict Covid-19 lockdowns and a weak property market. LME copper prices peaked at over $10,600/t in March this year.

Should China’s relaxation of its zero-Covid restrictions advance further toward a reopening of the economy, restocking is likely to play out, Goldman believes.

RBC Capital Markets: Mining stocks strong despite weakened demand from China

“If China were to return its copper stock to consumption ratio to pre-2020 levels, that would imply as much as a 500kt boost to physical demand,” Snowdown said.

Three-month copper futures on the London Metal Exchange traded at $8,543 on Monday morning in Europe, after posting their strongest month since April 2021 in November on hopes for a demand boost if China eased its zero-Covid policies.

Goldman last week hiked its 12-month forecast to $11,000/t from $9,000/t and upgraded its average price forecast to $9,750/t for 2023 and $12,000/t in 2024.

Bank of America commodity strategists believe copper could rally to $12,000/t in the second quarter of 2023, given the right set of circumstances. Such a scenario would require a pivot by the U.S. Federal Reserve toward less aggressive monetary policy tightening, limiting upside in the U.S. dollar, and for demand to remain supported as the planned energy transition accelerates.

“Notwithstanding the macro headwinds, physical markets have remained tight, highlighting the lack of spare copper units available at present,” Commodity Strategist Michael Widmer said in Bank of America’s 2023 metals outlook report.

Widmer also noted that global copper demand has proven resilient, rising on an annual basis year-to-date as purchases outside China run at record levels.

While macroeconomic headwinds will likely persist into 2023, Widmer said offtake should remain positive when modeled on global GDP growth.

Lithium is relatively abundant but it's extremely hard to extract and process: American Lithium CEO

“Taking this a step further … China’s grid spending has offset weakness in the wider economy: indeed, building out the electricity infrastructure has completely offset weakness in the housing market,” Widmer said, adding that the key question going forward was whether this is a one-off or the beginnings of a structural trend.

He also noted that the correlation between global copper demand and industrial production growth has broken down over the past year and a half.

“In our view, this confirms to some extent that green spending has already supported global copper demand and physical markets,” Widmer said.

Bank of America’s collated data on demand growth rates from sectors linked to net-zero policies indicated an expansion in copper consumption of 4.5% year-on-year out to 2030. By contrast, potential demand growth has been 2.1% over the past two decades, Widmer noted.

Consensus more cautious

Although taking a more cautious view to reflect softer market sentiment as a result of the expected global economic downturn, strategists at Fitch Ratings last week suggested any hit to copper will be offset by “supportive short- and medium-term supply-demand drivers.”

“We expect a moderate increase in global primary copper consumption of about 2% in 2023, similar to 2022. Mine supply will grow by around 4% in 2023, although disruptions may affect that,” they said in a research note.

“A tightly balanced market and minimal global copper stocks (less than two weeks’ consumption) will sustain prices in 2023. Copper’s longer-term prospects are supported by demand from the energy transition.”

China eases Covid restrictions on travel within the country

Fitch maintained a spot copper price assumption of $8,000/t for 2023, sliding to $7,500/t in 2024 and 2025.

However, other institutions retain a more bearish view, at least in the short term. BNP Paribas in its 2023 outlook forecast a three-month copper price of $6,800/t in the first quarter of next year, falling to $6,465/t in the second, but recovering to $8,250/t by the end of 2024.

“We expect a fall in European manufacturing activity to add to the impact of slowing Chinese and U.S. activity,” the French lender said.

“Rising mine supply and accelerating output of Chinese refined copper are expected to push the market into a sizeable surplus in 2023, easing LME spread tightness and weighing on prices.”

pga77 pga77 slot suster123 kijangwin ladangtoto rajatogel slot-gopay kakek zeus scatter-hitam scatter-hitam kijangwin suster123 scatter-hitam slot taiwan slot-gopay hoki99 slot linkaja slot ovo nenektogel gasing777 tumi123 bento123 fendi188 gasing777 66kbet scatter-pink scatter-hijau ladangtoto ladangtoto gudangtoto rajatogel nusantara4d ladangtoto scatter-hitam slot-bsi scatter-hitam ladangtoto slot-bri pga77 slot-goceng slot-10k opaltogel scatter-hitam jp188 ladangtoto slot-linkaja slot-cimb slot-gopay slot77 sbankjago sbca slot-qris ladangtoto slot-dana idnslot slot-mandiri slot-maybank ladangtoto scatter-hitam ultra889 sumseltoto medantoto rajampo raja88jp indoslot88 asiatoto88 mpltoto wajik777 tumi123 kembangtoto alexistogel mawartoto rajatogel wajik777 madu303 mpo888 sikat88 gucitoto pga77 pga77 ladangtoto olx188 gacor88 ayah4d pga77 pga77 gemilang4d ladangtoto petir388 kembangtoto sikat88 ying77 slot212 texas88 slot138 rp888 rumah258 cuan88 slot-bonanza scatter-hitam slot-dana kakek-merah rajampo lampung4d alay4d jambitoto manadototo binjaitoto pajaktoto popotogel 888slot jacktoto kaskustoto keitogel laku77 wing4d bostoto laetoto afktoto rudaltoto ojktoto pga77 rajagacor olxslot rajatogel jacktoto bento4d kaskustoto pga77 preman69 mpo808 mpoxtra838 rajatogel rajagacor ladangtoto asiatoto tumi123 olx188 bro138 galaxy77 asiatogel88 gacor88 rajatogel slot77 padangtoto rasa4d sdtoto omtogel ltdtoto dentoto rupiahtoto gacor88 pgbet slot-thailand mawartoto rajatogel rajatogel rudaltoto mawartoto topjitu toto188 mom4d 888slot sdtoto angkasa168 hondatoto 888slot bro138 scatter-hitam slot-zeus kaskustoto rajatogel tumi123 mustang303 api5000 senja777 super33 dewanaga89 hokibet dewa234 sizi99 cuanwin77 liga2000 88mega popi99 bento123 macauslot 888slot hoki178 jackpot108 gadunslot gacor88 king999 rajampo big777 kedai69 rp888 rajapaito ladangtoto rajatogel gtr11 slot99bet alba88 stars77 mangga2bet klik88 rans288 fin4d ceriabet leoslot88 agen108 dewasurga88 dragon222 gacorbos88 medusa88 pga77 pga77 pga77 surgawin homebet88 bento4d pga77 pga77 jago777 sgpslot api88 m77casino m77slot rajatogel bento4d m77casino m77slot hoki178 rudaltoto wajik777 gacor88 rajampo ladangtoto pga77 juragan69 texas88 mahjong69 galaxy77 pga77 hebat303 pga77 pga77 ladangtoto asiatoto inatogel toto88 jacktoto robintogel ladangtoto pga77 888slot wajikslot olx188 olxslot inatogel pga77 gacor88 pga77 bento4d robintogel asiatoto dewatoto gacor88 888slot slot-zeus slot-dana pga77 pga77 zodiak69 licin4d pga77 888dewa asian303 888slot indosultan88 slot-zeus Slot-Mahjong 66kbet rumah258 ying77 betseru pga77 scatter-hitam jayagaming lido88 hoki178 batik77 medusa88 duniabet303 royaltoto indosultan88 wdbos 888slot 888dewa wajik777 royaltoto wdbos gacor88 raja328 planet77 dewi188 slot-zeus slot-dana dewihoki fendi188 hoki178 batik77 pga77 naga138 robintogel surga55 pga77 slot-maxwin rajampo pga77 lotte4d 888slot pga77 angkasa168 pga77 cermin4d bento4d pga77 toto88 operatoto gacor88 olx188 m77casino m77casino pga77 pga77 888slot api5000 pga77 pga77 m77casino pga77 juragan69 pga77 presidenslot bighoki alexabet88 g200m m77casino mentari138 hoki178 olympus88 mega55 pga77 pga77 royaltoto panen77 pga77 garuda4d pga77 royaltoto sultantoto pga77 aksara4d arwanatoto bobatoto pga77 gacor88 m77casino 888slot 66kbet sritoto m77casino iramatogel mantra88 ajaib88 pga77 dewaslot88 pisang123 pga77 pga77 gas138 olx188 muara777 gacor88 dewaslot99 royaltoto pusat4d bos5000 pga77 888slot scatter-hitam pga77 sdtoto wis77 pamanslot meme4d diana4d prada4d neko4d angsa4d sinar777 brio4d pga77 okgas21 scatter-hitam slot-bonanza 98toto kingdomtoto direkturtoto rupiahtoto pga77 pga77 wongtoto akartoto kompastoto sultantoto gacor88 sumbartoto planet4d ngamenjitu 888slot royaltoto pga77 dorahoki pga77 pga77 pos4d djarumtoto kenzototo jejuslot mega777 royaltoto nirwana88 pga77 888slot pga77 pga77 palu4d royaltoto rogtoto omtogel Slot-Mahjong pga77 slot-demo pga77 slot-maxwin slot-zeus shitam sthailand pga77 pga77 pga77 pga77 pga77 pga77 pga77 pga77 pga77 pga77 pga77 pga77 pga77 pga77 pga77 pga77 888slot pos4d pga77 m77casino pga77 pga77 pga77 pga77 pga77 pga77 pga77 pga77 pga77 royaltoto sultantoto pos4d api5000 888slot pga77 pga77 m77casino pga77 pga77 pga77 pga77 pga77 pga77 pga77 pga77 pga77 pga77 888slot gacor88 royaltoto pos4d 66kbet ying77 rajapaito pga77 pga77 gacor88 scatter-hitam pga77 scatter-hitam pga77 pga77 pga77 pga77 pga77 pga77 888slot pos4d sultantoto royaltoto gacor88 bintaro88 pga77 jumbo99 biolabet slot99bet 66kbet ying77 rp888 888slot luxury333 orion88 toto-176 slotakunpro