The Smartest Investors Club
  • Business
  • Politics
  • Investing
  • World
  • Business
  • Politics
  • Investing
  • World

The Smartest Investors Club

Investing

Copper Prices Hit 22 Month High as Supply Concerns Mount

by April 12, 2024
April 12, 2024
Copper Prices Hit 22 Month High as Supply Concerns Mount

Copper prices hit a nearly two year high this week, and according to analystsat investment bank Citigroup (NYSE:C) that’s a sign the red metal has entered its second secular bull market of the century.

Over the past two months, copper has surged by more than 15.75 percent, fueled by disruptions at mining operations that have threatened refined copper production in China, a major global supplier.

“The recent disruptions to major mines are starting to ripple through the industry,” said strategist Daniel Hynes of Melbourne’s ANZ Bank. “A group of 13 major copper smelters in China is preparing for a possible 10 percent production cut due to a collapse in treatment and refining charges.”

In an article published on Thursday (April 11), Warren Patterson and Ewa Manthey of research firm ING said they believe copper’s price move can be attributed to a global supply deficit.

“The main catalyst for copper’s rally is the unexpected tightening in the global mine supply, most notably First Quantum’s (TSX:FM,OTC Pink:FQVLF) mine in Panama, which has removed around 4,000,000 tonnes of the metal from the world’s annual supply,’ they wrote. The Cobre Panama mine was forced to shut its doors at the end of 2023.

Copper’s 2024 price performance.

Chart via the London Metal Exchange.

“In addition, Anglo American (LSE:AAL,OTCQX:AAUKF), said it was cutting output by 200,000 tonnes. And Codelco, the world’s biggest copper producer, is struggling to recover from the lowest output in a quarter of a century,” they added.

Analysts at Bank of America (NYSE:BAC) also believe copper supply is at risk, citing a lack of new mines. The firm recently raised its 2024 price target to US$9,321 per metric ton (MT), up from its previous forecast of US$8,625.

On the demand side, China’s economic recovery is adding fuel to the fire. Positive signs like a strong Purchasing Managers’ Index and rising exports are raising hopes for a renewed surge in Chinese copper demand.

During the 2000s bull market, copper prices leaped more than fivefold in three years on the back of rapid urbanization and industrialization in the Asian nation. Analysts suggest a similar trend could unfold over the next three years.

Other base metals, including zinc, have also experienced gains amid concerns over Chinese refined output risks.

Exploration challenges threaten future copper supply

Copper supply woes are not a new issue — decades-old problems are behind the growing shortfall.

Declining exploration spending has disproportionately impacted junior mining companies. These companies, which are vital for early stage discovery, witnessed an 8 percent drop in exploration expenditures in 2023.

Junior explorers play a key role in finding new copper deposits, but lack of investment makes it difficult for them to secure funding for the high-risk, high-reward projects needed to identify the next generation of copper mines.

While overall copper exploration funding saw a 12 percent increase last year, the majority of these investments — around US$3.12 billion — went toward existing or near-production assets instead of discovery.

Copper’s positive price fundamentals have prompted analysts to anticipate further increases in the coming months.

As of 9:57 a.m. EDT on Thursday (April 11) copper was trading at US$9,374 on the London Metal Exchange.

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com
0
FacebookTwitterGoogle +Pinterest
previous post
Nickel Price Update: Q1 2024 in Review
next post
Pacific castaways’ ‘HELP’ sign sparks US rescue mission – and an unexpected family reunion

You may also like

Chariot and Mustang Lithium LLC Repossess Horizon and...

Fortune Minerals Completes New Option Agreement to Acquire...

Retraction: Singular Research Initiates Coverage On Bitcoin Well

5 Top Weekly TSXV Stocks: Sandfire Resources Gains...

Nuclear Fuels Increases Private Placement; enCore Energy Corp....

Blue Lagoon Completes Second Tranche of Private Placement...

Critical Metals Corp Completes Stage 1 Investment for...

NorthStar Gaming Unveils Sports Insights 2.0

Putin Mulls Uranium, Nickel and Titanium Export Limits...

Forum Extends Uranium Mineralization for 200 Metres at...

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest

    • NorthStar Gaming Announces Receipt of Management Cease Trade Order

    • Department of Justice opens criminal investigation into NY AG Letitia James

    • Brunswick Exploration Announces Brokered Private Placement for Gross Proceeds of up to C$2.5 Million, with a Lead Order from a Strategic Investor

    • Drill Contract Awarded for Elizabeth Hill. Technical Visit Completed to Define Drill Targets

    • $2.6M Placement and SPP to fast-track China entry and sales

    Categories

    • Business (1,633)
    • Investing (4,790)
    • Politics (7,535)
    • World (6,124)
    • Terms & Conditions
    • Privacy Policy
    • About us

    Disclaimer: thesmartestinvestorsclub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 thesmartestinvestorsclub.com | All Rights Reserved


    Back To Top