2024 price forecast for copper looking more bullish<\/strong><\/p>\n\n\n\n Analysts have been more bullish on copper\u2019s 2024 prospects despite the still cloudy macroeconomic outlook. Median forecasts have the commodity\u2019s average price for 2024 set at USD8,718.75\/MT, 2.3% higher than the 2023 forecast. Come 2025, this climbs even higher to USD9,149.17\/MT (+4.9%). <\/p>\n\n\n\n The positive trajectory in price should be good news for our local bourse\u2019s listed copper producer Philex Mining Corp. (PX). With the company\u2019s Silangan Mine expected to be operational by 2025, higher copper prices should allow the company to maximize the mine\u2019s higher copper grades (0.67% vs Padcal\u2019s 0.17%) as it slowly transitions away from the ageing Padcal Mine.<\/p>\n\n\n\n Supply benchmarks for 2024 showing signs of tightness<\/strong><\/p>\n\n\n\n While organizations such as the Int\u2019l Copper Study Group (ICSG) were previously expecting a supply surplus for the market next year, recent updates have cast doubt on this outlook. As mentioned in a Reuters article by Andy Home, benchmark copper smelting terms for 2024 are lower at USD80\/ton compared to the USD88\/ton that was recorded for this year. This is significant seeing as benchmark smelting terms Chile copper production on a downtrend<\/strong><\/p>\n\n\n\n Data on Chile\u2019s recent copper production figures also lend strength to the possibility of supply tightness next year. Note that Chile is responsible for 24% of the world\u2019s copper output. As of 9M23, Chilean copper production stood at only 965,600 MT, a significant drop off of 18.4% compared to the 5-Year moving average level for the same time period. The trend in the 5Y moving average (MA) itself, for production in the first 9 months, also shows that Chilean copper production has been trending downwards ever since the comparable period in 2020.<\/p>\n\n\n\n Smelter demand is high<\/strong><\/p>\n\n\n\n Potential tightness can be further compounded by the ramp up in China\u2019s demand for raw copper imports. The communist state has been repositioning itself as a refiner of raw copper as it aims to secure availability of the processed material and move up the value chain. Current Chinese smelting capacity is at 8.8-Mn tons, with Bloomberg forecasts predicting an additional 2.4-Mn tons of capacity coming online by 2026. With wind and solar capacity in the country also set to grow two-fold before 2030, this should all the more bolster the medium-term appetite for raw copper which can be refined for the production of solar panels and windmills. While Chinese GDP forecasts are admittedly not looking too sunny, it should be mentioned that economists are expecting a jump in fixed asset investment next year from 3.5% to 4.5% which could signify greater industrial demand next year for the metal.<\/p>\n\n\n\n
are basically the fees that smelters charge to producers in exchange for refining their copper concentrates. A decline in benchmark charges serves as an indicator of potential tightness in the market, given that the lowering of charges by copper refiners is typically done when they are competing over limited supply.<\/p>\n\n\n\n