Copper
AltX-listed mining company Copper 360 has assured its shareholders that the dip in the copper price to about $8 300/t early in August is nothing to worry about, despite it marking a 15% drop from the price of $9 037/t in January.
CE Jan Nelson believes the copper market fundamentals remain strong and that the price for the red metal will unlikely drop below $8 000/t for the year.
He explains that the copper price is still well above historical lows, notably the $2 000/t price experienced in the previous down dip in the cycle.
The lowest copper price in recent years was experienced in April 2020, when copper fell to $5 057/t.
The latest price dip has been influenced by the banking crisis and concomitant infrastructure development slowing down in the US, dampened economic growth in China as a result of Covid-19 lockdowns, as well as economic scares in Europe owing to the Ukraine war.
However, copper will continue decoupling from traditional indicators as the green economy gains momentum and demand for the commodity intensifies with more renewable energy builds.
Goldman Sachs predicts the copper price to reach $11 000/y by year-end, while more bearish stakeholders believe copper will average above $8 000/y.
Nelson concludes that the copper price will remain high, given a decline in Zambian copper production of 10% recently, as well as the International Copper Study Group forecasting a copper supply shortfall of 114 000 t that will only level out next year.
It also helps that China’s use of refined copper will double from a forecasted growth of 1.2% in 2023 to 2.6% in 2024.