Mercuria: Supply deficit may push copper prices to record highs

On May 21 (Wednesday), the head of metals and mining research at Mercuria Energy Trading Group stated that the company expects a shortage of 700,000 mt of copper concentrates and 300,000 mt of copper cathode this year, which could drive copper prices to record highs.

Mercuria's well-known copper bull, Nicholas Snowdon, said he expects copper prices to hit new highs sooner or later.

Speaking at the LME Asia Week conference in Hong Kong, Snowdon said, "The copper market is currently in an extremely fragile state. For us, the question is not whether there will be a shortage, but when. This situation is likely to occur in the second half of the year."

Snowdon pointed out that amid strong demand in China, supply disruptions and stagnant output have occurred, while a significant amount of copper has been diverted to the US due to the expectation of potential import tariffs.

Analysts said this week that they expect a substantial amount of copper to continue flowing to the US as long as the tariff threat persists and the price premium at the US Commodity Exchange (COMEX) makes trading favorable for traders and producers.

COMEX copper prices reached a record high of $11,633 per mt on March 26.

Snowdon said that approximately 500,000 mt of copper will enter the US in the second quarter of this year.

Sharon Ding, an analyst at Ningxia Ruiyin Lead Resource Recycling Co., Ltd. (UBS), said at an event on Tuesday that she expects 450,000-500,000 mt of copper to be shipped to the US from March to May, 250,000-300,000 mt higher than normal.

Last week, copper inventories in China surged, breaking a three-week streak of significant declines, sparking concerns about a copper shortage caused by the global supply shift to the US.