Industrial metal prices are maintaining high due to supply shortages as workers in large mines strike. The situation may not improve in the near future.
Copper prices are rising strongly. For the first time in five months, prices have surpassed $ 6,000 per tonne as demand forecasts will rise from the world’s largest consumer, China, after data showed that industrial production rose sharply. Q2 GDP growth was 6.9%, higher than the 6.8% forecast by analysts. For the past week, the copper price ended the session at the highest level in 4.5 months.
At midday yesterday, the price of copper has risen to $ 6,035 a tonne, the highest since March 1 (when prices were at $ 6,015 a tonne).
China’s industrial output rose 7.6 percent in June, the strongest gain in three months, while fixed asset investment rose 8.6 percent in the first six months, surpassing forecasts. Retail sales in June rose 11% from the same period last year, the strongest since December 2015 and beyond forecasts.
In the first four months of 2017, the world copper market surpassed about 80,000 tonnes as demand from China slumped, according to the International Copper Research Organization (ICSG). Comprising 48% of global copper consumption, a 7% drop in demand in China in the first four months of the year has driven demand for refined copper around the globe down by around 3%, although consumption outside of China increased. lightly about 0.5%.
However, in April alone, world markets lacked 53,000 tonnes of refined copper after missing 18,000 tonnes in March. Global copper output in April was 1.94 million tonnes, while consumption was 2 million tonnes. . Statistics from China’s copper stocks show that April was 58,000 short tons, after surpassing 22,000 tonnes in March.
The latest economic data from China as investors raised hopes of imports into the country will increase sharply. In the context of copper supply may turn to shortage, this item is expected to bring big profits for investors.
News site Reuters day made the comment 17/7, copper shortage this year will become more serious as more copper mine production in South Africa affected by the strikes.
In early 2017, the market was interrupted when workers at the Escondida (Chile) – the world’s largest copper mine strike and Grasberg (Indonesia) stopped production.
Workers in the Zaldivar mine of the Antofagasta Group (Chile) strike in the middle of June, while Peruvian copper mines also plan to start doing the same.
Survey results from world-renowned analysts conducted by Reuters show that forecasts of a lack of supply in the world market this year may double to 44,000 tons, from 17,000 tons forecast. in May.
However, analysts say the situation will change next year, and the market will have surplus of 74,000 tons.
“We are almost convinced that more copper mines will be disrupted by the end of the year … but it’s not going to be serious, and the price may be at the current level,” he said. said economist Amy Li of the Australian National Bank in Melbourne.
But analysts say prices will not rise against today, with analysts forecast an average of 26 analysts expect London’s LME pegged at $ 5,726. down 3% from the closing price on July 21.
Since the beginning of the year, copper has risen by 8%, the fourth most popular among the six metals.
Aluminum is the strongest metal gainer in this group, up 15%, due to concerns about a supply shortage if the Chinese government succeeds in shutting down all its small aluminum mills. environment as expected.
In May, analysts cut 74 percent forecasts for aluminum surpluses, but by July they had increased 52 percent to 125,000 tonnes, while 2018 was forecast to fall short of 87,000 tonnes. Half of the previous 200,000 tons shortfall.
“We think some older (Chinese) production facilities will have to be shut down in the near future, but it will be difficult to reach the full medium term,” said Stephen Walker, director of research. RBC Capital Markets said.
Similar to copper, analysts say that the supply of aluminum will affect prices, and the average price in the fourth quarter will be $ 1,918 a ton, up only 0.5% from the 21st close. / 7.
Zinc is forecasted to be in serious short supply after a series of large zinc mines shut down or shut down last year.
Experts have warned that global zinc deficiencies this year will amount to 412,000 tons, compared with a loss of 336,500 tons last year, and 2018 will be short of 190,000 tons.
But like the other metals, the supply shortage will not be able to raise prices further because it is at a very high level.
Experts estimate zinc prices will average $ 2,734 a tonne in the fourth quarter, down 1.9 percent from the July 21 close.
“Prices will not accurately reflect market conditions, as they have risen a lot in the first half, more than the impact from the underlying factors. The market will continue to be scarce for a few more months, “said Daniela Corsini, an analyst at Intesa Sanpaolo in Milan.