Bullish long-term trends and tight supply have pushed copper prices to record highs in various markets around the world. The metal has gained nearly 5 percent in the overnight market, while it is trading at an all-time high in the US.
The metal has recorded a jump of around 19 percent in the year so far.
It is also trading at a two-year high on the London Metal Exchange (LME), while the CME, Shanghai and the Indian markets have seen the metal touch record highs after posting strong gains in April and May so far.
The CME Copper prices are also trading at a premium of $300 over LME, which shows that the US demand is improving. The investors are bullish over the long-term prospects and there is some tightness in supply as CME copper inventories have declined by 30 percent since March.
The copper rally has also received a boost from new Chinese stimulus measures. Demand has been weak in the world’s largest copper consumer amid a slowdown in the economy. However, the issuance of bonds worth 1 trillion yuan last week to raise funds is likely to stimulate key sectors of the economy.
Investors believe the inventories are sufficient for the current year. However, concerns remain for FY25 and FY25 when the demands are likely to be higher. Copper smelting in China has already declined by 10 percent in 2024.
Several factors have also brightened the long-term prospects of copper as strong demands have been witnessed from electric vehicle manufactures, data centres, renewable energy sector and the defence industry.
State-run Hindustan Copper's stock price has also recorded a growth of over 7 percent in the past one month on BSE. On May 15, the stock was trading at Rs 380.2 on BSE at 14:15 pm.
Copper supply & demand- Bank of America projections
Global production and (consumption) in 2023 - 25.98, (25.69)
For 2024* -27.20 (27.66)
For 2025* - 27.05 (28.13)
-LME prices at $10,200 a ton vs all-time high of $10,845 a ton
_Copper set to head higher, hit $12,000 a ton, according to the forecasts of Bank of America, Citi, and Goldman Sachs
*Numbers for 2024 and 2025 are estimates
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