copper smelter

Bombardho/Adobe Stock

The copper market saw a near doubling in prices over the last year.

Copper fell to an LME low in March 2020 of $4,371 per metric ton. Fast forward to this year, however, and it closed at $8,764 prior to this past weekend.

But anyone following the copper market will know that even that price is off a late February high of over $9,600.

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Copper market ups and downs

So why has the price dropped back so significantly from its high?

Is this just a pause before forging higher, as Citi Bank would have us believe?

In a recent report, Citi said it expects the metal to fetch $10,000 per metric ton “sooner rather than later” on the basis of a tight supply market. Furthermore, Citi forecast a return to over $9,000 over the next three months and to $10,000 between 6-12 months out.

But a Reuters column by Andy Home offers a more cautious analysis. Home suggests the rapid rise last year and into this was the result of an unexpectedly strong rebound in Chinese manufacturing. As a result, that prompted a surge in imports of refined metal.

Strong investor interest and supply chain restocking abetted price rises. Investors bought into the electrification story and demand from strong electric vehicle (EV) sales. They bought into Citi’s supply constraints, with mine supply hampered by ongoing pandemic restrictions and the longer-term narrative of falling grades and lack of new mine investment.

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This morning in metals news: the US steel capacity utilization rate ticked up to 77.9% last week; Novelis announced new sustainability targets; and the United States International Trade Commission (USITC) issued a ruling on seamless carbon and alloy steel standard, line and pressure pipe.

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US steel capacity utilization hits 77.9%

US steel capacity utilization rose to 77.9% for the week ending April 3, the American Iron and Steel Institute (AISI) reported. Steel capacity utilization for the previous week reached 77.6%.

steel arrow up

Pavel Ignatov/Adobe Stock

Production during the week totaled 1.77 million net tons. The output marked an increase of 15.7% year over year. Furthermore, production increased by 0.3% from the previous week.

Novelis announces new sustainability targets

Aluminum sheet manufacturer Novelis announced new sustainability targets and a pledge to reach net-zero carbon emissions by 2050.

Furthermore, Novelis said it aims to reduce its carbon emissions by 30% by 2026.

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