Copper (Cu) has surprised us on the downside over recent months as China’s economic slowdown has outweighed the increased demand for electrification. A short-term oversupply has caused the price to tumble almost 20%, with Goldmans reducing their forecast for 2025 from $US15,000 to $US10,100, still above today’s price. In May, the same analyst labelled Cu as the “best trade seen in his career”. Last week, BHP, who recently failed to acquire Anglo American (AAL LN) for greater Cu exposure, used its annual result to warn the copper market would remain in a “marginal” surplus in 2024.
- We’re now looking for copper to trade between $US8500 and $US9500/mt into Christmas.
- However, we remain very bullish towards Cu over the medium/longer term; hence, we believe the current pullback in related names is a buying opportunity.
MM is bullish towards copper medium-term
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