Copper prices rose on Wednesday nearing February’s peak of $9,617, the highest since 2011.
Copper for delivery in May was up 1.41% in afternoon trade, with futures at $4.2725 per pound ($9,3995 a tonne) on the Comex market in New York.
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Copper is right now still heavily reliant on the Chinese cycle and the world’s largest buyer is making it very clear that it doesn’t want raw material prices to rise any further.
China’s industry ministry said on Tuesday the country will take steps to stabilise prices and strengthen supervision of the market after a spike in prices.
Rising commodity prices – driven by higher raw material costs, a recovery in downstream demand and speculation from the financial market – have increased Chinese manufacturers’ costs and squeezed margins, Ministry of Industry and Information Technology spokesman Huang Libin said at a press conference.
“This round of commodity prices rise has had impact on the manufacturing sector but is manageable overall,” Huang said.
Goldman Sachs last week doubled down on its supercycle shout out, forecasting copper would average $15,000 per tonne in 2025.
Citi is also firmly in the bull camp with a short-term target of $10,500.
“We highlight that the ‘super’ part of the supercycle is now” with the market facing the largest supply deficit since 2003-2004, Citi said.
Antofagasta (LON: ANTO) said on Wednesday copper production in the first quarter of 2021 fell 5.7% to 183,000 tonnes from the same period a year ago, as a recent and sharp spike in covid-19 cases in Chile takes its toll.
The production decline, Antofagasta noted, also reflected lower grades at the company’s flagship Los Pelambres mine, which generated 84,900 tonnes of copper in the first quarter, a drop of 9% year on year.
Despite the challenges, the company reaffirmed full-year copper production of between 730,000 and 760,000 tonnes, with net cash costs averaging $1.25 a pound.
(With files from Reuters)