Copper will probably enter a supply shortage this year, and prices may end up being higher than in 2022, with a target price of $10,000 per tonne, research analysts say. On the demand side, we anticipate that a revival in mainland Chinese demand for copper, along with a falling dollar, will drive up prices. According to research organization Fitch Solutions Country Risk and Industry Research, a division of Fitch, “on the supply side, we anticipate operational challenges to persist in Latin America in 2023 with moderate gains in output.”
The economic and financial analysis division of Dutch multinational financial services company ING, ING Think, stated that despite its negative short-term prognosis, copper should continue to dominate over $7,500 until 2023 because of a limited supply. According to Goldman Sachs, the average price of copper will be around $9,750 this year, rising to $12,000 by 2024. For a three-month supply contract, copper is currently charging $8,385 per tonne and $8,362 for cash delivery.
Copper prices may gain from the Chinese economy’s rebound and move into a supply deficit this year, according to online trade provider IG Group’s IG Bank. It anticipates that the price of red metal, which is used in industrial machinery, plumbing, electric vehicles, and wiring, will surpass $9,500. Fitch Solutions reported that due to “edging stronger demand coupled with a relatively poorer supply picture,” it was increasing its copper price forecast to $8,500 per tonne from the prior $8,400.
The lowest approval in the previous 15 years, according to Goldman Sachs, was for only 2,63,000 tonnes of sanctioned copper projects in 2022. . According to Fitch Solutions, the price of copper was very volatile in 2022 due to competing supply and demand forces. Concerns over supply interruptions following Russia’s invasion of Ukraine drove prices to an all-time high of $10,674 per tonne on March 4, according to the report. However, when the macroeconomic situation in the world deteriorated and worries about future demand, particularly from mainland China, arose, prices fell drastically in late April.
Due to decreased pricing and the pressing need to meet inventory requirements in advance of the impending demand boom anticipated in 2023, Chinese consumers’ desire for copper has picked up again, according to the research firm. Copper supply is reportedly extremely low in the world market, according to IG Bank, which also said that Goldman Sachs, Bank of America, and Trafigura have predicted that the metal will trade in deficit territory until 2023 and may even hit new high territory that year. Fundamentally, according to analysts, copper appears more positive.