Source: Golden Ten Data
Citibank said that after a lapse of 20 years, copper has once again entered a bull market, and the recovery of European and American economies will bring strong demand!
Analysts said that soaring copper prices showed no signs of slowing down, and supply risks and improved demand prospects for energy transition metals contributed to the rise in copper prices.
Demand for copper is widely regarded as a barometer of economic health. This base metal is critical to the energy transition and is an essential material for manufacturing electric vehicles, power grids, and wind turbines.
Wall Street banks are optimistic about the outlook for copper prices until the end of this year.
Earlier this week, Citibank analysts said they believe the second long-term copper price bull market of this century is underway, and the current bull market is about 20 years since the last bull market cycle.
Citibank said on Monday that based on the bank's basic scenario assumptions, copper prices are expected to show an upward trend in the next few months, reaching an average of 10,000 US dollars per ton by the end of this year and rising to 12,000 US dollars per ton in 2026.
They added: “The basic scenario we set for copper prices to rise to $12,000 per ton is that the cyclical increase in demand for copper in 2025 and 2026 is only a slight increase.”
In addition, Citibank analysts also said, “Under our bull market scenario, if there is a strong cyclical recovery in the next 2-3 years, copper prices are likely to explode by more than 66.7%, reaching more than 15,000 US dollars per ton.”
Bank of America analysts, on the other hand, have raised their target for copper prices in 2024 to $9,321 per tonne, higher than the previous forecast of $8,625 per tonne.
The Wall Street bank said on Monday that copper is at the core of the energy transition, which means that the lack of mine supply growth is getting more and more attention. “The tight supply of concentrates is limiting production in smelters and refineries, and may force refined metal consumers to re-enter the international market.” Bank of America analysts wrote in the research report.
They also said, “As the US and European economies bottom out and rebound, demand in both places should pick up; at the same time, increased demand due to the energy transition may cause the copper market to run a deficit this year.”
However, not everyone is convinced that copper prices will maintain the expected increase this year.
Colin Hamilton (Colin Hamilton), a commodity analyst at BMO Capital Markets, said in an interview, “The commodity market always regulates itself and can always find ways to mitigate (too high prices). If we can't solve it on the supply side, then naturally we will solve the problem by harming the demand side.”
Hamilton said, “For example, if the price of copper rises to four times the price of aluminum, you may see the effect of other metals replacing copper. I see some very high copper price targets in the market. Although copper prices may temporarily reach those levels, then you will see an adjustment in demand in key areas.”
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