Copper for delivery in three months at LME rose 2.31% to settle at $9284 a tonne on Thursday after hitting a six-week high of $9299. The Shanghai Copper 2106 contract closed at 69250 yuan per ton, the highest since March. Shanghai Copper 2106 rose as much as 3.06 per cent to 69500 yuan / ton in early trading, the highest since February 26, but then gave up its gains to 68730 yuan / ton at 10:45, a rise narrowed to 1.97 per cent.
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On the macro side, supported by strong US economic data and earnings data, US stock market sentiment became more and more optimistic. The three major US stock indexes closed higher, and the Dow and S & P 500 hit record highs. The US economy grew optimistically, with US retail sales rising 9.8 per cent month-on-month in March and expecting 5.8 per cent, rebounding after falling 2.7 per cent last month, the biggest increase since May last year. The improvement of the economy has played a certain role in boosting the rise in copper prices.
At the same time, the optimistic expectations of some investment banks on copper prices have also contributed to the rise in copper prices. Goldman Sachs recently said it expects copper prices to reach $15000 a tonne by 2025 and raised its 12-month target price to $11000 a tonne.
Goldman Sachs is bullish on copper to $15000
CITI Bank holds the same view, saying that copper consumption will be much higher than expected in 2021 and advising customers to increase their copper holdings.
In addition, mining magnate Robert Friedlander also said recently that copper is crucial in promoting the electrification of the global economy and is an indispensable metal for national development.
Mining giants believe that copper supply has become a national security issue.
Domestically, with the continuous improvement of consumption, copper consumption continues to increase. Copper imports rose sharply in March, the arrival of the peak consumption season in March and April boosted expectations of increased copper demand, and some domestic refineries began to enter the overhaul period in April, and expected production may decline.
SMM believes that copper prices remain bullish in the long run. However, at present, the copper price is already in a high stage, and the further upward of the copper price will have a negative impact on the relevant industrial chain, or restrain the downstream trading, so it may remain high in the short term. Follow-up price trends and development trends still need to continue to pay attention to domestic consumption.
With the gradual control of the epidemic, the gradual recovery of the global economy and the trend of carbon neutralization, will the demand for copper usher in more room for growth? What will happen to the global economy and copper supply and demand in 2021? Can the price of copper reach a higher point after hitting a nearly 10-year high, as some investment banks say?
In view of the above hot topics, SMM will solemnly hold the 16th China International Copper Industry chain Summit and New Infrastructure Copper-based Materials Application Forum in 2021 in Shanghai on April 22-23, 2021, inviting industry experts, scholars and enterprise celebrities to conduct a comprehensive interpretation on the spot. You are welcome to scan the QR code in the picture below to view the details of the meeting, the business cards of the guests, and sign up online:
