BMI Research, a research institution owned by Fitch Solutions, raised its 2024 average copper price forecast from 8800 US dollars/ton to 9,200 US dollars/ton due to tightening supply prospects and the overall weakening of the US dollar's strength.
The Zhitong Finance App learned that BMI Research, a research institution under Fitch Solutions (Fitch Solutions), raised its 2024 average copper price forecast from 8,800 US dollars/ton to 9,200 US dollars/ton due to tightening supply prospects and a weakening overall strength of the US dollar.
Copper prices once rose to their highest level since January 2023 due to supply concerns. Since the beginning of this year, copper prices have shown a steady upward trend. The price of copper has risen by more than 10% so far this year, and has risen 6% since April. However, copper prices fell on Thursday, dragged down by a stronger dollar.
ANZ said the recent interruptions in production at major mines have begun to affect the entire industry. According to reports, due to a sharp drop in processing and refining costs, some large copper smelters in China are preparing to cut production by 10%.
Furthermore, BMI said that China is the world's largest consumer of metals, and hopes that Chinese demand will improve due to the recovery of the manufacturing industry may drive price growth.
In the long run, BMI expects the price to reach $11,700 per ton in 2033, as strong demand prospects will continue to cause structural deficits to persist as the green transition accelerates.
On the production side, BMI predicts that copper production will increase by 3.1% year on year, supported by China's capacity expansion. However, supply issues in Panama, including the closure of the large Cobre copper mine under First Quantum (FQVLF.US), mean that copper concentrate is now in short supply, straining the market and putting pressure on the supply of refined copper.
Meanwhile, global consumption is expected to increase 3.5% year over year to 28 million tons due to poor prospects in major markets.
Commodity trading giant Toke Group said on Monday that demand for copper associated with artificial intelligence and data centers could increase by as much as 1 million tons by 2030 and exacerbate supply shortages by the end of this decade.
Analysts also said that the transition to green energy, as well as the shift to artificial intelligence technology, is expected to drive huge demand for copper.
Also, as market oversupply dragged down prices, BMI maintained its forecast for zinc prices in 2024 at 2,500 US dollars/ton, which is lower than the annual average of 2,651 US dollars/ton in 2023.
The research company said that although demand in mainland China was expected to remain strong throughout 2024, factors such as sluggish growth prospects in major markets will limit price increases. Zinc prices are expected to average 2,560 US dollars/ton in 2024-2028.