Source: Zhitong Finance
Copper prices are close to their highest level since January last year, as investors' concerns about global iron ore supply and possible production cuts in Chinese smelters are growing.
Chile's National Copper Company (Codelco), the world's largest copper producer, is trying to bounce back from its lowest production level in 25 years. Ivanhoe Mines Ltd. reported a decline in production at its Kamoa-Kakula complex in the Democratic Republic of the Congo, and the drought conditions in Zambia increased supply uncertainty.
According to a report released by Goldman Sachs Group on Thursday, analysts expect that the “huge deficit” in the second quarter will push the copper market into a spot premium in the second half of the year, and reiterated the bank's bullish forecast that copper prices will rise 65% by 2025.
The global manufacturing industry is showing initial signs of recovery, which reinforces expectations of a tightening environment in the copper market.
China's smelters are considering cutting production after iron ore processing costs have dropped to a level close to zero. China accounts for more than half of the world's refined copper production.
As of press time, copper prices on the London Metal Exchange had risen 1% to $9,359 per tonne. The price of gold is still up more than 4% this week. The market is awaiting US non-farm payrolls data, which may show signs of strong economic activity, which may cause the Federal Reserve to keep interest rates high for a longer period of time.