Rising Copper Prices Signal Strengthening Demand from China
In the world of global commodities, key metals have seen significant movements in prices and inventories recently.
Citibank has forecasted a rise in refined copper consumption for 2021, predicting an approximate consumption of 24 million metric tons. This forecast comes alongside a predicted 2.9% increase in consumption for next year, reaching 27.5 million tons.
Meanwhile, the London Metal Exchange (LME) has seen some fluctuations in metal prices. Zinc dipped 1.1% to $2,885.50 a ton, while tin gained 1.2%, reaching $34,130. Nickel, however, slipped 0.1% to $15,260. Aluminium, another major metal, fell 0.5% to $2,671 a ton in the LME market.
Citi expects the fourth-quarter aluminium prices to average $2,650. On Tuesday, the premium of the cash aluminium contract against the three-month contract widened to $16 a ton, the highest since March, indicating a potential tightness in the market. However, industry sources suggest ample supplies on the physical market, which could balance out the premium increase.
The market for zinc, used to galvanise steel, may be tight due to decreased inventories, but ample supplies on the physical market could offset this tightness. Zinc inventories in LME-registered warehouses have decreased significantly in recent months.
In the copper market, a shift is expected next year, with the global market predicted to move from a 63,000-ton surplus this year to a deficit of 308,000 tons in 2022. Lead lost 0.4% to $1,997 in the LME market.
These shifts and fluctuations in the metal markets are a testament to the dynamic nature of the global commodities landscape, and it will be interesting to see how these trends develop in the coming months.
