Swiss multinational commodity trading company Trafigura has predicted that electric vehicles, artificial intelligence (AI), power infrastructure and the automation boom will further increase demand for copper by at least 10 million tonnes by 2035. Graeme Train, head of metals analysis at Trafigura, says a third of his 10 million tonnes of new demand will come from the electric vehicle sector. ”The third is power generation, transmission, and distribution, and the rest goes to things like automation, manufacturing capital expenditures, and cooling systems within data centers.,” He said.
A few weeks ago, Trafigura chief economist Saad Rahim predicted that AI alone could increase demand for copper by 1 million tonnes per year by 2030.
“If you look at the demand from data centers and the related demand from AI, the growth is suddenly exploding.” Rahim said. ”In any case, that 1 million tonnes will exceed the deficit gap of 4-5 million tonnes by 2030. No one has really considered much of the balance between supply and demand. ” added the analyst.
Wall Street is becoming increasingly bullish, with copper futures rising to near a five-year high of $4.46 per pound ($9,812/tonne). Citi predicts the metal is entering its second secular bull market this century. ”This is driven by rapid growth in decarbonization-related demand.” Adding, “Only higher prices can solve these deficits. ”
Citi points out that the last copper bull market was in the 2000s, when prices rose. China's rapid urbanization and industrialization led to a bull market for copper in the 2000s, which quintupled in three years. Citi advised corporate consumers to “hedge their copper risks.”explosive price rise“Again over the next three years.
City says copper Prices can reach $10,500 per ton Over the next three months, average prices for Q2 and Q3 will rise to $10,000/tonne from a previous estimate of $95,000/tonne. Copper reached the City's target of $9,741 per tonne on Thursday.Citi's new short-term bull market impacts copper prices Jumps to $12,000 per ton Over that period, LME and SHFE copper stocks plummeted over the next three months.
Meanwhile, metals strategists at Bank of America say the “copper supply crisis is already here.”A lack of mining projects is becoming increasingly problematic for copper. This, combined with investments in green technology and global economic recovery, is expected to push prices up to US$10,250/tonne by the fourth quarter.”, 8% higher than the previous view.
Shortages due to disruptions at major mines in key producing regions are squeezing copper supplies as Chinese smelters move closer to approval by regulators to cut production. Rising US PMIs and supply disruptions due to drought in Zambia are also bullish for prices in the near term. Adding to the supply disruption, the US and UK have banned metal exchanges from accepting new aluminum, copper and nickel produced by Russia, a move that could further increase price volatility and supply uncertainty. Highly sexual. Russia is a major metal producer and China is the world's largest producer and consumer of copper.
Copper stocks rise
Unlike their lithium peers, copper mining stocks have outperformed the market by a wide margin. Global X Copper Miners ETF (NYSEARCA:COPX) returned 19.2% compared to 14.4% in 2019. Energy Select Sector SPDR Fund (NYSEARCA:XLE) and 6.3% S&P500 From the beginning of the year to the present.
Tuesday, based in Phoenix, Arizona. Freeport McMoRan Company (NYSE:FCX) reported first quarter 2024 non-GAAP EPS of $0.32, beating Wall Street consensus by $0.04, on revenue of $6.32 billion (up 17.3% year-over-year) Over $20 million. The company's consolidated production for the quarter was 1.1 billion pounds of copper, 549,000 ounces of gold, and 18 million pounds of molybdenum, with average realized prices of $3.94/pound copper, $2,145/ounce gold, and 1 pound molybdenum. It was $20.38 each. For the second quarter, the company will report sales of 1 billion pounds of copper, 0.5 million ounces of gold, and 21 million pounds of molybdenum, for consolidated sales of 4.15 billion pounds of copper, 2 million ounces of gold, and 21 million pounds of molybdenum. I expect it to be lbs. 84 million pounds of molybdenum for the full year 2024. FCX stock is up 22.4% over the past 12 months.
Stocks of companies based in Canada FIRST QUANTUM MINERALS LIMITED. (OTCPK:FQVLF) is on the rebound, with the mining giant up nearly 40% year-to-date rio tinto (NYSE:RIO), Saudi Arabia's Manara Minerals Investment Companyand a number of Japanese trading companies are considering investing in First Quantum Minerals' Zambian copper mine.
First Quantum is considering selling minority stakes in Zambia's Sentinel and Kansansi mines after being forced to close its main copper mine in Panama last year, according to Bloomberg. Zambian assets may also attract interest from Chinese miners, including: purple mining (OTCPK:ZIJMF) (OTCPK:ZIJMY) and Jiangxi Copper (OTCPK:JIAXF), First Quantum's second largest shareholder. Last year, Zambia accounted for about half of First Quantum's copper production and revenue, and also generated more than $450 million in operating profit.
Written by Alex Kimani, Oilprice.com
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