Citi Research has projected that copper prices will likely face challenges in the short term but are expected to recover to $9,500 per ton within three months, with a potential rise to $11,000 by early 2025. This forecast marks a revision from previous estimates of $10,000 and $12,000 for the 0-3 month and 6-12 month periods, respectively.
The anticipated recovery is attributed to an improvement in global manufacturing sentiment, driven by expected Federal Reserve rate cuts, alongside anticipated inventory draws and market deficits in the latter half of 2024. Citi highlighted that the current strength in China’s refined copper output and visible inventories is largely a result of unsustainable scrap market conditions and consumer destocking in response to earlier price surges.
Analysts note that as prices approach the $9,000 per ton level, these dynamics are likely to reverse. However, Citi has moderated its average price forecasts for 2025 and 2026, reflecting increased confidence that the market can avoid significant deficits through alternatives such as substitution and enhanced scrap recovery, suggesting a less aggressive price rally.
As of Friday, copper prices were trading below the $9,100 per ton mark, influenced by ongoing concerns regarding demand from China, the largest consumer of copper.