(Bloomberg) — Copper traded near the highest level since January last year as investors weighed mounting concerns over global ore supply and potential production cuts from Chinese smelters.
Codelco, the world’s biggest producer, is struggling to bounce back from the lowest output levels in a quarter century. Ivanhoe Mines Ltd. reported a drop in output at its Kamoa-Kakula complex in the Democratic Republic of Congo and drought conditions in Zambia are adding to supply uncertainty.
Analysts at Goldman Sachs Group Inc. expect that “large deficits” from the second quarter will push the copper market into backwardation in the second half, according to a note dated Thursday, reiterating the bank’s bullish call that sees copper prices jumping 65% by 2025.
The global manufacturing sector is showing tentative signs of recovery, fueling expectations of tightening market conditions for copper. Still, China is grappling with a years-long property crisis and sagging consumer confidence.
China’s smelters, which produce over half the world’s refined copper, are considering output cuts after ore processing fees fell to near zero.
Copper fell 1.1% to $9,252 a ton Friday on the London Metal Exchange as of 11 a.m. in Singapore as all base metals retreated. Prices are still up more than 4% this week. The market is awaiting the US nonfarm payrolls data, which could show signs of robust activity that may lead the Federal Reserve to keep interest rates higher for longer.
Iron ore futures fell for a third day, declining 0.7% to $97.05 a ton in Singapore. Chinese markets are closed for holidays.
©2024 Bloomberg L.P.
The post Copper Near 14-Month High as Global Supply Risks Support Prices appeared first on Bloomberg.