LME WEEK: Mercuria says copper deficits could push prices to records

Trading house Mercuria forecasts a copper concentrate deficit this year of 700,000 metric tons and a 300,000-ton deficit for refined metal that could push prices to record highs, its head of metals and mining research said on Wednesday.

Nicholas Snowdon, a high-profile copper bull at Geneva-based Mercuria, said he expects record prices for the metal sooner than later.

“The copper market today stands in an acute state of vulnerability, and for us, it’s a question of when, not if, that this market moves into a state of scarcity that may well happen in the second half of this year,” Snowdon told the LME Asia Week conference in Hong Kong.

Snowdon pointed to supply disruptions and stagnant output at a time of resilient Chinese demand even as vast volumes of copper have been diverted to the United States in anticipation of potential import tariffs.

Analysts told Reuters this week that they expect large shipments of copper to the US to continue as long as the threat of tariffs persists and price premiums on the US-based COMEX make deals profitable for traders and producers.

COMEX copper hit a record high of $11,633 a metric ton on March 26.

Snowdon said that some 500,000 metric tons of copper would be pulled into the US during the second quarter of this year. UBS analyst Sharon Ding told an event on Tuesday that she expects 450,000 to 500,000 tons of copper to be shipped to the US in the March-May period, about 250,000-300,000 tons above what would normally be expected.

Last week, copper inventories in China jumped sharply, breaking a three-week run of large withdrawals that had sparked worries about shortages caused by the pull of global supplies towards the US.

(By Lewis Jackson, Hongmei Li, Liz Lee and Tony Munroe; Editing by Tom Hogue and Christian Schmollinger)