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UBS forecasts copper pricing amidst supply challenges

2024.02.03 20:21


© Reuters. UBS forecasts copper pricing amidst supply challenges

Copper costs proceed to face above the $8,200/metric tonne (mt) mark, defying weaker investor sentiment in China, as a sequence of mine supply downgrades drive analysts’ prediction of a persistent market deficit in 2024.

Analysts at UBS foresee a goal of $9,500/mt for , recommending traders seize shopping for alternatives on market dips. Alternatively, they counsel capitalizing on comparatively low possibility market volatility to safe upside participation in copper.

A key issue contributing to the copper narrative has been the fixed revision to supply progress. Prominent copper producers comparable to Anglo American (JO:) and First Quantum (NASDAQ:) have revised down their manufacturing steering for 2024, signaling challenges in increasing output. The latest collapse in therapy fees displays a tighter concentrated market, doubtlessly resulting in a decrease refined supply. Analysts at UBS globally goal a refined supply enhance of three.5% in 2024, with issues rising as world change stock builds stay under seasonal norms.

Despite lackluster demand from conventional sectors within the US and weak spot in Europe, strong demand from China in 2023 has performed an important function in offsetting these challenges. Global decarbonization efforts are anticipated to drive electrical community and transportation demand for copper. Although the development and home equipment sectors could face headwinds resulting from easing constructing completions in China, ongoing stimulus measures within the nation are anticipated to supply underlying help.

Analysts at UBS forecast a world copper consumption enhance of three.3% in 2024, as a probable manufacturing restoration in Europe and the US aids in overcoming destocking challenges. With restricted seen copper inventories at hand, costs are anticipated to surge to USD 9,500/mt or larger in late 2024, in keeping with UBS’s outlook.

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