The surge in copper prices has ignited optimism in the market, with analysts forecasting even more significant price increases in the near future. Referred to as “Dr. Copper” for its ability to predict global economic health, copper’s value has been on the rise due to its crucial role in industrial advancement and the shift towards electrification and sustainability, particularly in electric vehicles, renewable energy, and power infrastructure.
Driven by a tightening supply chain, which includes reduced output from Chinese smelters and dwindling global reserves, copper prices have reached their highest levels in almost a year, although there has been a slight pullback in recent trading sessions.
The potential for a resurgence in demand, especially from China, coupled with a global move towards accommodative monetary policies by major central banks, sets the stage for a further increase in copper prices.
Financial experts are revising their outlook on copper, with many anticipating a bullish trend. Russ Mould of AJ Bell notes that copper’s ascent towards $9,000 per tonne is significant, especially amid ongoing concerns about demand from China. Ewa Manthey from ING remains optimistic about copper’s prospects despite short-term demand challenges, buoyed by expectations of the Federal Reserve’s policy shift. ING predicts LME Copper prices to reach $9,000 per tonne by year-end.
Morgan Stanley Research’s commodities analyst, Amy Gower, suggests that disruptions in the copper market may lead to a deficit rather than a surplus in the coming years, presenting investment opportunities in mining companies with growth potential.
Goldman Sachs highlights historic tightness in global copper inventories relative to demand, projecting a 40% price increase over the next 12 months, especially in the second half of the year. Goldman Sachs analyst Nicholas Snowdon anticipates a surge to $10,000 per tonne by year-end and $12,000 per tonne by the end of the first quarter of 2025 due to intensifying supply pressures.
European mining giants like Rio Tinto Group, Glencore, Anglo American plc, Antofagasta plc, and Boliden AB are poised to benefit from the surge in copper prices. Shares of companies like Antofagasta and Glencore have already seen significant gains, with Antofagasta’s shares reaching record highs and Glencore’s shares posting their strongest monthly performance since February 2022.
