CHARTS: The coming critical minerals trade war is BRICS short of a load
"While a large number of countries around the world continue to talk about securing raw material supply, China is actually doing something about it."
Copper futures trading on the Comex market in New York raced ahead on Wednesday as global supply disruptions came back into view and large-scale speculators place huge bets on rising prices.
In massive volumes of more than 3 billion pounds by lunchtime copper for delivery in September jumped to a high of 2.9795 a pound ($6,569 per tonne), up more than 3% from Tuesday’s close to the highest since end-November 2014.
The Chinese government’s efforts to rein in credit growth in order to avoid the buildup of asset bubbles are likely to dampen demand
Copper’s 2017 year to date gains in percentage terms now top 18% and the red metal has recovered 54% in value after falling to six-year lows below $2.00 a pound in January last year.
The outlook for the rest of the year is more subdued however.
According to an August survey by FocusEconomics copper prices are set to dip after getting slightly ahead of fundamentals following the rally from its summer lows:
The Chinese government’s efforts to rein in credit growth in order to avoid the buildup of asset bubbles are likely to dampen demand for the red metal going forward, while the resolution of the dispute at the Grasberg mine would boost supply.
This month 18 analysts polled by FocusEconomics took a wait-and-see approach and kept their projections unchanged for Q4 2017, while five upgraded their forecasts and one projection was revised down from last month’s estimate.
Analysts project that prices will average $5,722 per tonne in Q4 2017 and $5,832 per tonne in Q4 2018. The lowest forecast for Q4 2017 is $4,899 per tonne, while the maximum forecast is $6,200 per tonne.
2 Comments
Steveo
Look back at what Goldman Sachs said about copper for 2017 and their total I turn after the mining strikes. Most analysts predicted utter gloom so, great article, but they are wrong, and will continue to be wrong. Modern rail networks alone will push up demand. Amtraks need to replace a rediculous amount of copper wiring due to salt water damage from years back on sandy, fast speed rail lines being built, there is just not enough and the stokes and near strike she in South America are just the start. Copper is king. Too much focus on China and people forget to look anywhere else. Copper prices may consolidate but one thing is for certain, it will continue to correct upwards tonnes highs.
Sarah Pine
The ExMetrix forecast models correctly predicted the situation of the non-ferrous metal market in the past seven months of 2017. Read our newest publication: http://www.exmetrix.com/posty/non-ferrous-metals-market-booming-by-the-end-of-2017/