INTERNATIONAL copper analysts have projected the price of copper to continue rising in 2021 and could hit US$9.500 per tonne by year-end.
This projection stems from the back of an anticipate rebound of the global economy, sustained growth of industrial activity as well as robust metal demand by China, global COVID-19 vaccination rollout, and a weaker dollar.
It is also envisaged that the upcoming elections and labor negotiations in Chile and Peru could play a significant role in the price of the commodity.
ABN AMRO Group senior economist Industrial Metals Markets Casper Burgering said the current environment provides a lot of confidence to sector players concerning the market price of copper.
“As a result, total long positions are high, but this also brings a downside price risk because it increases the likelihood of profit-taking by speculators. In 2020, the market has taken a substantial advance on the good news of 2021. The copper price will rise further in 2021, but in a lower gear,” he said.
And global commodity research analysts at Bank of America said “We lift price forecasts especially for copper, which we see averaging $9,500/mt ($4.31/lb) in 4Q21, with the market likely flipping into a deficit, as inventories are low.”
They said that the coronavirus pandemic’s impact on the global supply chain and logistics have resulted in year-on-year supply of the metal from Chile and Peru to tighten, said Global Commodity Research analysts at Bank of America.
“While we have factored in an increase of mine production and also scrap supply this year, this is unlikely to be sufficient to prevent the copper market flipping into a deficit,” Bank of America said.
Meanwhile, Canaccord Genuity mining analysts expect Chinese stimulus to support copper demand in combination with an expected global economic recovery in 2021.
“We now expect copper prices to average US$3.50/lb ($7716/mt) in 2021, an approximate 17 percent increase on our previous forecast of US$3.00/lb ($6,614/mt),” Canaccord said..