Copper Prices Touch 14 Month Highs

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Copper Prices Touch 14 Month Highs

Copper Prices Touch 14-Month Highs On Tight Supply Forecast

Copper prices made a new record on Thursday by hitting its 14-month highs. The copper prices are supported by optimism about China's demand and recovery.

Additionally, there are reports of production cuts from some of the top Copper refiners. As a result, there's now a higher chance that the supply will only get tight during the coming months.

Copper Futures Up By 0.5%

The 3-month futures contract of Copper gained 0.5% on the London Metal Exchange and was seen at nearly $9347/ton. In the USA, the price of copper futures is now around $4.2328/pound with a +0.5% change.

Overall, both of these copper contracts are at their highest levels, only seen during January 2023. Amidst all of this, the dollar appears to be under pressure and has already moved lower from its 5-month highs.

The recent upside seen in the Copper was driven by the positive data coming from China. The data showed a consistent improvement in China's manufacturing sector last month.

As China is a major demand driver for copper, it makes sense for copper prices to rise in anticipation of a tight supply.

However, the data shows that copper inventories in China have actually increased in 2024! Despite this, an uptick in demand could soon fix this imbalance and push China to import more Copper.

Amidst all of this, copper mines are undergoing production disruptions that are affecting the supply of copper ore worldwide. Additionally, the processing fees have touched zero for a lot of major smelters!

According to reports, around 13 smelters from China have suggested to cut production by 5% - 10%. However, it still remains to be seen when these cuts will be implemented.

According to analysts at ANZ, the copper market has been lifted by news of supply disruptions across the globe. Furthermore, the comments from the Chinese smelters are also positive about the copper ore prices.

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