Market research organisation BMI – a Fitch Solutions company – has maintained its average yearly copper price forecast at $8 800/t for this year.
This is higher than the 2023 average price, and is supported by a decline in US dollar strength and supply constraints.
In a copper market overview report published on January 10, BMI said that, although it expects prices to improve slightly this year, weak demand from Mainland China and a limited growth outlook across major markets will place a cap on prices, tilting the balance of risks to the downside.
In the longer term, BMI expects the copper market to be in a sustained deficit as the green transition accelerates along with the demand for ‘green’ metals, including copper.
Prices averaged at $8 523/t in 2023, lower than the average of $8 788/t in 2022. BMI notes that prices have been on a steady downward trend since mid-January last year, after having peaked at $9 356/t on January 23 on the back of expectations of a strong rebound in demand from Mainland China.
Prices are now hovering at about $8 463/t as of January 5, down from the $8 832/t reached on July 31 last year, pressured by relatively high inventories alongside broader-based weak market fundamentals.
This year, BMI expects copper prices to rise slightly from current levels owing to a weaker US dollar and growing supply concerns.
BMI expects global refined copper production to grow by 3.1% year-on-year this year, supported by Chinese expansion capacity. However, it expects supply issues in Panama to hamper copper concentrate supply growth, leaving the market tight and putting pressure on refined copper supply in the coming months.
In the long term, BMI forecasts refined copper production to remain in growth territory, with output climbing from 27-million tonnes in 2023 to 36.3-million tonnes by 2032, averaging 3.7% yearly growth.
In terms of global copper consumption growth, BMI forecasts a rise of 3.5% year-on-year to 28-million tonnes this year, limited by weak demand in Mainland China and a subdued outlook for other major markets.
However, the organisation notes that the green energy transition will partially offset this downside pressure. Over the rest of the decade, BMI says that it anticipates strong demand growth driven by the renewables and autos construction industries.
It expects global copper demand to increase from 27-million tonnes in 2023 to 38-million tonnes in 2032, averaging 3.9% yearly growth.