Top copper trader Toke Group said that the recent surge in copper prices to record levels does not match the actual supply and demand situation. Toke Group is usually one of the most optimistic voices in the market.

In a commentary on the first half performance released by the trading company on Thursday, Toke's chief economist Saad Rahim wrote,"The volatility of non-ferrous metal prices far exceeds the level that could be possible in the spot market fundamentals, especially copper."

Earlier, some analysts also said that before this wave of copper price increases, the supply and demand side was not particularly bullish. Copper stocks in registered warehouses of the Shanghai Futures Exchange reached 321,695 tons, the highest level since April 2020; copper stocks registered in the London Metal Exchange also increased to 118,950 tons, the highest level since April 24.

Copper prices surged to a record high of $11,104.50 per ton last month, but have since fallen back about 10%. Copper prices traded on the London Metal Exchange were trading at $10,025 per ton on Thursday.

The market expects more easing policies to be implemented. Analysts at ANZ Bank said in a research report that Canada's central bank has cut its policy rate by 25 basis points, becoming the first G7 central bank to cut interest rates after the radical tightening cycle that began in 2022. They expect the European Central Bank, which will hold a meeting today, to also cut interest rates by 25 basis points.

They also said that if inflation continues to improve, these central banks may further cut interest rates in the coming months. Lower interest rates may stimulate more commercial activities, boost demand for raw materials such as copper, and push the dollar lower, which will also boost commodities.

For a long time, Toke has been one of the most optimistic voices in the copper market. Kostas Bintas, the former head of copper at the trading company, predicted in 2021 that copper would enter a long-term bull market, possibly reaching $15,000.

Last fall, Rahim acknowledged that the performance of the copper market did not meet Toke's expectations. He attributed the poor performance of the copper market to the strong US dollar. On Thursday, he attributed the rise in copper prices to "record investment flows".

However, he expects the copper market to tighten due to supply shortages, and events such as First Quantum Minerals Ltd.'s closure of its copper mine in Panama may trigger record supply shortages in the semi-processed copper concentrate market.

Rahim wrote that disappointing mine supply" has led to a serious shortage of concentrates, forcing smelters to cut production, and even if demand is weak, refined metal inventories will tighten."

For copper prices, Citigroup pointed out in its latest research report that copper consumption is strong, but other indicators indicate that prices will remain stable in the short term. It is expected that against the backdrop of weakened sentiment in manufacturing, copper prices will undergo short-term consolidation near current levels, and copper prices below $9,500 per ton are attractive buying levels in the medium term and are suitable for bullish investors and consumers. The bank remains optimistic about copper over the next 12-18 months.