Recently, copper prices have seen a lot of shifts, owing to the pandemic. It’s an essential part of almost every industry out there. We likely own and use several products that use copper in some way or the other. It’s used in factory applications, construction, electronics, and power generation. Goldman’s longer term outlook based on a “clear structural bull story” is $15,000 by 2025.Copper is easily one of the most widely used compounds around.
#Copper prices today full
The consensus forecast for full year 2023 is $8,400, a rather uninspiring 5% upside from the price in New York early Tuesday. Thirteen out of 35 analysts cut their forecast for the copper market in the Barcelona-based researcher’s August survey. Goldman joins other sceptics, including Capital Economics ($7,250), JP Morgan ($6,500) and Standard Chartered ($7,850) who see prices going lower from today’s level according to data compiled by FocusEconomics. Goldman has hacked its original forecasts and now sees copper averaging only 7,400 a tonne in Q4 2022, down from over $10,000 before. Local governments have also started to lend to developers to continue construction of uncompleted homes as buyers threaten non-payment unless their paid-for homes are ready to move in.Īs Goldman Sachs pointed out in an October 2021 report, while construction and its associated sectors account for 40% of China’s copper demand, construction itself accounts for 20% and over 90% of that demand comes from completions, not from new starts. Over the weekend PBOC slashed its key interest rate by 1.5%, matching its biggest cut on record. In July plans for a $44 billion fund backed by the central bank to rescue beleaguered developers came to light. When the Chinese government starts buying copper on the open market it’s usually read as a sign of prices bottoming.īeijing is ramping up measures to prop up the housing market. SMM also said rumours about strategic stockpiling of copper by China’s state reserves bureau remain “unconfirmed”. That is down more than 60% from total inventories of more than 150,000 recorded this time in 2021. In contrast, cargoes of iron ore, for which China is significantly more reliant on imports than copper, are down 3.5%.ĭespite robust imports, physical stocks of copper across the country are at year lows, according to Shanghai Metals Market, dropping to 61,300 tonnes as of Friday. “By the end of 2021, inventories had fallen to only 2.5 days of consumption, and at 240,000 tonnes today, inventories cover consumption by only 3.5 days – still an extremely low number.”Īs for concerns about the appetite of China – responsible for some 55% of the world’s copper consumption – the bellwether metal is the one commodity that is showing positive import growth this year.Ĭhina’s unwrought copper imports are up nearly 6% while concentrate shipments are around 7% higher so far this year, encouraged by the fall in price, according to Capital Economics, a London-based research firm. In 2005, copper exchange inventories covered consumption by only two days. “When adjusted for days of consumption, inventories are almost as low as they were back in 2005, just before copper prices more than doubled. Goehring & Rozencwajg points out that after bottoming at 165,000 tonnes at the end of 2021, stockpiles rebounded to 300,000 by mid-May, but have since pulled back to 240,000 tonnes:
#Copper prices today update
Wall Street natural resource investment house Goehring & Rozencwajg Associates in their Q2 update released last week exhibits a five year chart of global copper warehouse inventories.
When the Chinese government starts buying copper on the open market it’s usually read as a sign of prices bottoming
In July, with the price falling to a 20-month low, the firm’s analyst conceded that their great expectations for copper in the short term will have to be postponed.īut Goldman’s main argument of the dangers of a “scarcity episode” or a “stock-out” remains well supported. In April, Goldman forecast copper reaching an all-time high before the end of 2022 because the market was “sleepwalking towards a stock-out.” In February the investment bank predicted a “scarcity episode” by the end of the 2022 as global stocks fell to dangerously low levels. In particular, tracking Goldman Sachs’ trajectory on the copper market has been something of a white knuckle ride. Copper’s short term woes frequently butt up against its longer term tailwinds, thanks to its central role in the green energy transition, making accurate forecasting difficult if not impossible.
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