Analysts Release Updated Copper Price Forecast for 2024

Following the recent rally, analysts are closely evaluating their forecasts for copper prices, influenced by a variety of factors including supply constraints, geopolitical issues, and shifting demand trends across different sectors.

Copper Prices Rally

Although copper prices fell on Wednesday, the metal has seen a notable rally over the last few months, reaching record highs earlier this week. Copper, a key industrial metal, hit an intraday peak of $5.1990 per pound, or $11,460 per tonne, marking a 27% increase for the year.

This rally has been partly driven by expectations of tighter supply as production cuts by miners start to take effect.

Copper Prices Forecast for 2024

In spite of the recent rally, analysts at Citi predict that copper prices will stabilize over the next three to six months. Current London Metal Exchange prices are hovering near their target range of $10,500 per tonne for the zero to three-month outlook, having recently achieved their six to twelve-month goal of $11,000 per tonne.

Citi analysts believe that investors rightly pushed prices up from $8,000 to $10,500 per tonne over the past few months. However, they also suspect that a significant portion of the approximately $30 billion in copper fund investments this year is tied to machines. They anticipate that some of this investment will shift to consumer hedgers and macro funds, whom they consider would find prices below $10,000 per tonne attractive. Indicators such as visible inventories and market spreads are likely to remain unappealing for some time as Chinese semi-fabricators reduce their refined metal stocks and global scrap dealers do the same with scrap.

Current price levels are believed to be adequate to prevent severe deficits in the copper market this year, with the scrap market responding accordingly.

Meanwhile, analysts at JPMorgan view the current pricing expectations as exceeding fundamental values, suggesting that copper stocks are trading at fair valuations. They noted that copper has risen 27% year-to-date, amid what they see as exaggerated concerns about refined supply. This surge has positively impacted copper-related stocks such as FCX and TECK, which have risen by 20% and 24% respectively, although near-term investor sentiment appears to be turning more bearish.

JPMorgan also highlighted that the latest copper forward curve exceeds both their base case and their commodities team’s price forecast for the remainder of this year and into next year, indicating potential for further upside should bullish expectations come to fruition.