Copper is sitting around $6.05 per pound this week.
That’s up 3.77% since the beginning of the year and new market activity and analysts are both suggesting it has a long way to go.
Reports out of China have indicated that local smelters are targeting production cuts and this is leading forecasters to tip a continuing spike in prices.
Senior Australian commodity strategist Daniel Hynes reported this morning that copper prices hit an 11-month high overnight, with mine supply setbacks helping to push prices higher.
In his daily Commodity Wrap, Mr Hynes also noted the discussion by China’s major smelters into the potential to reduce production capacity, raising concerns for refined copper supply.
A recent sharp decline in treatment charges is said to have led to a discussion around output curbs.
He also noted that China’s monthly refined production grew 14% year-on-year to 12 million tonnes, but production curbs could cap this growth this year.
Leading research firm S&P Global recently forecast copper consumption could double to 50Mt by 2035.
In the lead up, copper prices are tipped to hit as high as $13,000/t this year.
Some analysts are estimating copper prices could grow by as much 75% over the next two years, with demand from the renewable energy sector a major driver.
Fitch Solutions subsidiary BMI has suggested a sliding US dollar and growing clean energy demand will see copper prices grow strongly in the latter half of the year.
Citibank is also reported to be bullish on copper benefitting from growing renewable energy growth with copper demand tipped to increase by an extra 4.2Mt by 2030.
This could potentially push copper prices to $23,000/t in 2025.
