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Copper prices are poised to reach an all-time high in the fourth quarter of 2024, with analysts from Fastmarkets projecting an average of $10,265 per tonne.
This bullish forecast, the analysts said, is driven by a combination of favorable macroeconomic conditions and tighter market fundamentals.
The critical metal traded for US$9,548 per tonne (US$4.33 per lb.) on Friday, up 12% from its position at the start of year, but down from its high of over US$11,000 per ton in May.
Key factors contributing to the surge include expected rate cuts by the US Federal Reserve and a substantial stimulus package from China.
Announced in September 2024, China’s stimulus injects 3.95 trillion yuan ($560 billion) into the economy, equivalent to over 3% of its GDP.
China saw a modest recovery in its physical market in August 2024, with the premium for grade A copper cathodes in Shanghai ticking upwards. This rebound is largely attributed to improved import conditions following a decline in London Metal Exchange (LME) prices.
However, price volatility continues to present challenges, according to Fastmarkets.
In addition to macroeconomic factors, seasonal trends and speculative positioning are expected to boost copper prices in Q4 2024.
Historically, the fourth quarter has been the strongest period for copper, and smelter production cuts alongside rising demand from China’s physical market are expected to tighten supply.
Fastmarkets’ long-term outlook also remains bullish, particularly due to rising demand for copper in the global energy transition.
By 2025, the grade A copper cathode premium in Rotterdam is projected to increase by 25% due to tighter supply and recovering demand in Europe, it said.
However, despite growing demand from green energy projects, Europe’s overall copper market remains weak, with Germany — the region’s largest consumer — facing sluggish demand from the manufacturing, automotive, and construction sectors.
In the US, optimism persists for long-term copper demand, fueled by anticipated supply imbalances and the increasing need for copper in green energy projects.
Fastmarkets also expects copper demand to grow at a compound annual growth rate (CAGR) of 2.6% through 2034.
Within the energy transition sectors, demand is expected to grow at a more robust 10.7% CAGR, driven by electric vehicles (14.3%), solar power (5.6%) and wind power (9.3%). Traditional industries are projected to see more modest growth at 1.4%.
