Copper was already trading near eight-year highs in January but prices for the red metal surged again in mid-February, with March contracts reaching US$4.12 per lb. on Feb. 22 – nearing an all-time high of US$4.58 per lb. in 2011, as investors bet that supply tightness will increase as the world gradually recovers from the Covid-19 pandemic.
Natalie Scott-Gray, a senior metals analyst at StoneX, forecasts copper demand in 2021 will rise by about 5% year-on-year, outstripping supply, which she expects to grow by 2.3% year-on-year. If her predictions come true, that means the global copper supply will move from a small surplus in 2020 to a potential deficit of more than 200,000 tonnes of copper this year. “We do not foresee a recovery in global supply this year, with Chinese markets more or less balancing out,” she said in an interview.
Copper inventories in London Metal Exchange-registered warehouses as of Feb. 19 were trading at 75,700 tonnes, close to a 15-year low of 75,550 tonnes in September 2020.