HONG KONG, May 16 (SMM) – While copper prices appeared to struggle at the moment, a brighter future awaits it, according to Vivienne Lloyd, senior analyst of base metals at Macquarie Bank.
Most market participants were “too bullish” on copper at the start of the year against the backdrop of various labour negotiations at copper mines in south America, she told delegates at a seminar by the bank on Wednesday May 16, in Hong Kong during LME Asia Week.
Lloyd said that supply disruptions from labour negotiations were overestimated and that about a third of the expected disruption has been resolved. She sees disruptions from other factors such as declining ore grade and prices.
On demand, data from China has shown “signs of fatigue” as grid investment declined, she said. China’s focus on deleveraging also provides headwind for copper, she added.
Lloyd expects the global copper market to remain in a surplus this year, but a more balanced picture would emerge in 2019. From 2020, the market will return to a deficit and she sees a bullish case for the following three to four years.
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