Copper prices climb to 2024 high as Citi calls the start of the metal’s second bull market this century

Soaring
copper
prices
show
no
signs
of
slowing
down,
analysts
say,
with
the
red
metal’s
rally
fueled
by

supply
risks
and
improving
demand
prospects
for
energy
transition
metals.

Copper
prices
with
May
delivery
traded
at
$4.323
per
pound
in
New
York
as
of
Wednesday
morning,
extending
gains
after
settling
at
its
highest
level
since
June
2022
in
the
previous
session.

Copper
briefly
hit
a
high
of
$4.334
in
intraday
trading
on
Tuesday,
reflecting
its
highest
level
since
the
middle
of
January
last
year.

Three-month
copper
prices
on
the

London
Metal
Exchange
traded
0.6%
higher
at
$9,477
per
metric
ton.

Demand
for
copper
is

widely
considered
a
proxy
for
economic
health.
The
base
metal
is
critically
important
to
the
energy
transition
ecosystem
and
is
integral
to
manufacturing
electric
vehicles,
power
grids
and
wind
turbines.

Wall
Street
banks
are
bullish
on
the
outlook
for
copper
prices
through
to
the
end
of
the
year.

Earlier
this
week,
analysts
at
Citi
said
that
they
believe
the
second
secular
bull
market
of
copper
this
century
is
now
underway
—
roughly
20
years
after
the
first
such
cycle.

Citi
said
on
Monday
that
it
expects
copper
prices
to
trend
higher
over
the
coming
months,
averaging
$10,000
per
metric
ton
by
the
end
of
the
year
and
climbing
to
$12,000
in
2026,
according
to
the
bank’s
base-case
scenario.

“Explosive
price
upside
is
possible
over
the
next
2-3
years
too,
if
a
strong
cyclical
recovery
occurs
at
any
time,
with
prices
potentially
rising
more
than
2/3rds
to
$15k/t+
in
this,
our
bull
case
scenario,”
analysts
at
Citi
said
in
a
research
note.

“Our
$12k/t
base
case
assumes
only
a
small
uptick
in
cyclical
demand
growth
over
the
course
of
2025
and
2026,”
they
added.

Separately,
analysts
at
Bank
of
America
have

raised
their
2024
price
target
for
copper
to
$9,321,
up
from
its
previous
forecast
of
$8,625.

The
Wall
Street
bank
said
Monday
that
copper
was
at
the “at
the
epicentre
of
the
energy
transition,
which
means
that
the
lack
of
mine
supply
growth
is
being
felt
acutely.”

“Tight
concentrates
availability
is
increasingly
capping
production
at
China’s
smelters
and
refiners,
potentially
pushing
consumers
of
refined
metal
back
into
international
markets,”
analysts
at
Bank
of
America
said
in
a
research
note.

“At
the
same
time,
demand
in
the
US
and
Europe
should
bounce
back
as
economies
bottom
out;
this,
along
with
rising
demand
from
the
energy
transition,
will
likely
move
the
copper
market
into
deficit
this
year,”
they
added.

Not
everyone’s
convinced
copper
prices
will
hold
onto
projected
gains
this
year.

“Commodity
markets
always
self-solve,”
Colin
Hamilton,
commodities
analyst
at
BMO
Capital
Markets,
told
CNBC’s “Street
Signs
Europe”
on
Tuesday.

“They
always
find
ways
of
softening
things
out.
If
we
can’t
solve
from
the
supply
side,
well
guess
what,
we’ll
hurt
demand
and
that’s
what
inflation
naturally
does.
That’s
why
we
had
underperformance
for
much
of
the
past
year,”
Hamilton
said.

“So,
if
copper
gets
say
to
let’s
say
four
times
the

aluminum
price,
you
would
tend
to
see
a
bit
of
switching
and
substitution.
I
see
some
very
high
copper
price
targets
out
there:
we
could
reach
them
temporarily,
but
then
you
would
see
demand
adjusting
in
key
areas.”

—
CNBC’s
Michael
Bloom
and
Lee
Ying
Shan
contributed
to
this
report.