copper price

copper mine

Gary Whitton/Adobe Stock

The copper price has resumed its rise this month after taking a brief pause in January.

Meanwhile, on the supply side, tightening began last year and could exacerbate in the year ahead. Strong demand from China, lack of new mine investment and enthusiasm about copper’s role in the renewables revolution are all contributing to the metal’s bullish run.

Copper’s outlook is strong, MetalMiner’s Stuart Burns explained earlier this week. However, it would not be a surprise to see short-term retrenchment.

“So, for investors to take profits and the copper price to fall back should not come as too much of a surprise after such a strong rise in prices,” he wrote.

“Furthermore, it does not undermine the longer-term bull narrative for the metal. It does suggest, however, copper consumers think carefully before fixing all their requirements for the year at today’s price.”

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

Global copper mine production down 0.2%

Mine output — or lack thereof — is contributing to the copper price hot streak.

According to data from the International Copper Study Group, global copper mine production fell by 0.2% year over year during the first 11 months of 2020. The reduction narrowed as the year progressed after a 3.5% aggregate decline in April and May.

Furthermore, the global copper market recorded an apparent deficit of 590,000 metric tons.

By country, second-largest copper producer Peru has recovered after COVID-19 impacts earlier in 2020. Peru’s copper mine output reached its highest levels last year in October and November.

Meanwhile, top producer Chile saw a decline in output from July-November. However, output through the first 11 months of the year matched that of the first 11 months of 2019.

Indonesian output rose by 36%. Output in the Democratic Republic of the Congo and Panama also increased.

Refined copper production picks up

On the other hand, refined copper production rose by 1.8% during the first 11 months of 2020.

Chile’s electrolytic refined output picked up by 28%. Meanwhile, Indian refined output fell by 19%.

Copper price surge

After a sideways January, the copper price has picked up again in recent weeks.

The LME three-month price closed Tuesday at $9,126 per metric ton. The copper price is by more than 14% over the last month.

The ICSG noted the average LME cash price for January reached $7,970.50 per metric ton, or up 9.8% from the December 2020 average.

Find more insight on MetalMiner’s LinkedIn.

copper mine

Gary Whitton/Adobe Stock

This morning in metals news: the copper price rally is going strong; meanwhile, Rio Tinto released its 2020 Annual Report; and, finally, Norilsk Nickel reported a fatal accident at one of its facilities.

Copper price rally

After a January lull, the copper price rally has resumed in February.

The LME three-month copper price closed Friday at $8,763 per metric ton, up 9.3% from the previous month.

Before the copper price rally, the price dropped to $7,748 per metric ton Feb. 2.

Meanwhile, Stuart Burns delved into the copper price rally earlier today.

Cut-to-length adders. Width and gauge adders. Coatings. Feel confident in knowing what you should be paying for metal with MetalMiner should-cost models.

Rio Tinto releases 2020 Annual Report

Miner Rio Tinto released its annual report and Sustainability Fact Book today.

“Our strong performance during 2020 was overshadowed by the destruction of the ancient rock shelters in the Juukan Gorge and I reiterate our unreserved apology to the Puutu Kunti Kurrama and Pinikura (PKKP) people,” Rio Tinto Chairman Simon Thompson said. “We fell far short of our values as a company and breached the trust placed in us. It is our responsibility to ensure that the destruction of a site of such exceptional cultural significance never happens again.”

Read more

copper bars

Shawn Hempel/Adobe Stock

Copper seems to be a one-way bet the last six months.

The copper price has risen from a low of $4,371 per metric ton in March last year to $8,631 per metric ton Friday on the LME.

According to Reuters, Goldman Sachs and Citi are doubling down on their bull calls for the copper market. The banks have raised their 12-month price target to $10,000 per metric ton.

Copper price drivers

Exchange-traded stocks are low. China has been buying voraciously as its economy bounced back from the early spring 2020 lockdown.

Many bulls are touting the green revolution story as reasons to buy. Automakers’ announcements of impending ends to the internal combustion engine and a total switch to electric has fueled projections of soaring demand.

Meanwhile, a lack of new mine investment over the last few years leaves the supply landscape short of new projects to meet projected demand.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

Reasons for pause

But not everyone is buying into the relentless rise in the copper price — at least not in the short term.

Read more

copper bars

Shawn Hempel/Adobe Stock

This morning in metals news: the copper price is on its way back up again; meanwhile, Rio Tinto reached a new power agreement for its ISAL aluminum smelter; and, lastly, oil prices continue to rise.

Copper price surges

After a sleepy January, copper prices are back on the ascent.

The LME three-month copper price closed last week at $8,251 per metric ton. The price marked its 2021 high and, furthermore, a more than eight-year high.

Copper — and other base metals — cooled in January ahead of the Lunar New Year celebrations in China.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

Rio Tinto reaches new ISAL power agreement

Rio Tinto announced a new power agreement for its ISAL aluminum smelter in Iceland.

“Rio Tinto has reached agreement on an amended power contract that will allow the ISAL aluminium smelter in Iceland to continue operating with an improved competitive position,” the firm said.

Read more

steel

gui yong nian/Adobe Stock

This morning in metals news: December steel shipments rose by 4.4%; meanwhile, miner BHP announced plans to work with Japanese steelmaker JFE to study how to reduce greenhouse gas emissions from the steelmaking process; and, lastly, the copper price has bounced back after a January lull.

Steel shipments rise in December

US steel shipments rose by 4.4% in December compared with the previous month, the American Iron and Steel Institute reported.

December steel shipments reached 7.05 million net tons.

Meanwhile, steel shipments in 2020 totaled 81.0 million net tons, or down 15.8% from 2019.

By product, hot rolled sheet steel shipments rose by 3%. Meanwhile, cold rolled sheet steel shipments fell by 3%.

Sign up today for Gunpowder, MetalMiner’s free, biweekly e-newsletter featuring news, analysis and more.

BHP, JFE to study curbing emissions in steelmaking process

Businesses around the world are making efforts to show consumers they are tackling the climate crisis in some form.

As we’ve noted recently in the automotive sector, General Motors unveiled plans to electrify its lineup and reach carbon neutrality by 2040.

Speaking of steel shipments, players in the steelmaking sector are also making similar announcements.

Miner BHP and Japanese steelmaker JFE will work together to study how to curb emissions from the steelmaking process.

Read more

copper bars

Shawn Hempel/Adobe Stock

The Copper Monthly Metals Index (MMI) increased for the fourth consecutive month, rising by 1.1%, as copper demand is likely to remain strong this year.

February 2021 Copper MMI chart

Copper prices traded sideways throughout January, which proved to be a slow month for the red metal. Most of its momentum over the past year came from China, which has stopped some of its manufacturing ahead of the Chinese New Year celebrations.

However, copper prices might pick up as key industries — such as construction, consumer appliances and automotive — continue to grow. Copper demand should also benefit from the “Buy American” policy that the Biden administration plans to implement.

The plan would promote the U.S. manufacture of essential components in construction, appliances, electronics and automotive.

The MetalMiner Best Practice Library offers a wealth of knowledge and tips to help buyers stay on top of metals markets and buying strategies.

Global copper demand

As mentioned above, it’s not likely that copper demand will slow down in 2021.

In the US, new home and home renovation demand spiked since the pandemic started, along with electronics demand. Analysts at CitiBank expect the copper market to shift into a deficit in the second half of the year with a minor surplus overall for 2021, Reuters reported. They also forecast deficits in 2022 and 2023.

The US Census Bureau and the US Department of Housing and Urban Development reported building permits in December increased by 4.5% compared to November and 17.3% above the December 2019 rate. Privately owned housing continued to increase in December, rising by 5.8% from the previous month and by 5.2% compared to December 2019. The uptrend started in September 2020.

China will continue to play an important role in the copper market. The country accounts for about half of global primary consumption, which is then used to manufacture export goods.

Read more

metals prices

Petr Ciz/Adobe Stock

When discussion of metals markets — indeed, any markets — considers likely price trends, it nearly always starts off looking in the rear-view mirror.

Last year’s copper market suggests a bull market driven by vociferous Chinese demand. Imports surged after China relaxed its spring lockdown. Prices rose strongly, up some 48% on the LME from March lows, led by speculative interest (particularly on the SHFE).

Bulls would have you believe we have much further to go.

But 2021 is not 2020.

The combination of stimulus and demand catchup will not be the feature in 2021 that it was in 2020. That will be true in China and the wider global economy.

Metals prices in 2021: what’s next?

Reuters recently reported the consensus price for copper this year is US $7,600 per metric ton, up 23% from last year’s consensus. However, it’s some $200 per metric ton below the current price.

However, on the other hand, 2021 is not likely to show the volatility we saw last year. Major black swans like a killer new mutant strain emerging excepted, expectations are prices will trade in a relatively narrow band this year compared to last.

Furthermore, 2022 is likewise expected to be much more stable. Still some years away from major electrification demand outpacing copper supply, 2022 is forecast to see a median price of US $7,625 per metric ton.

Do you know the five best practices of sourcing metals, including steel?

Price movements elsewhere

Accepting that the one thing you can be sure of with forecasts is they will be wrong, the underlying rationale has some merit because it applies to pretty much the whole base metals complex. Recent price movements suggest it applies to steel, as well.

Supply is recovering fast. While exchange stocks do not necessarily reflect this across all metals — some, like aluminum and zinc, have far larger off-market stocks — a realization that they are there will temper expectations of higher prices.

As economies recover from 2020 and the impact of ongoing lockdowns, Chinese demand (equivalent to roughly half the world’s output of many metals) will likely ease as the tailwinds of the stimulus measures wane and the economy pivots more toward consumption. China cannot afford to allow continued rising debt levels or stoke its hot property market. Regarding the latter, the authorities have already signaled their intent to damp down demand.

Local distortions may still support local markets – to the extent President Joe Biden’s “Buy American” plan may support local producers of steel and, in particular, should be beneficial for North American USMCA steel mills – but such price premiums will be relative to the rest of the world. In short, they won’t be sufficient to send the market in the opposite direction.

Reuters reported all the base metals, with the exception of tin, will likely be in surplus this year and next.

If there is one silver lining for metals consumers to look forward to in 2021, apart from an effective jab, it is that prices may be more stable. Furthermore, they will likely be more predictable and, for some, a little lower than they have been of late.

Sign up today for Gunpowder, MetalMiner’s free, biweekly e-newsletter featuring news, analysis and more.

copper bars

Shawn Hempel/Adobe Stock

This morning in metals news: the copper price fell to its lowest level in a month; US housing starts ticked up 5.8% in December; and China’s industrial profits rose 4.1% in 2020.

Copper price dips to one-month low

After surging in the second half of 2020, the copper price has slumped thus far in 2021.

The LME three-month copper price closed last week at $7,873 per metric ton, its lowest in a month.

The price had reached as high as $8,160 per metric ton earlier in January.

As we noted last week, the LME average cash copper price jumped 9.8% from November to December.

However, the copper price has not been the only metal to retrace this past month. Aluminum has also slowed down, closing the month at $1,987 per metric ton after reaching $2,068 per metric ton earlier in the month.

Furthermore, the lead price trended flat in January, while the LME three-month zinc price fell by 6.71%.

Amid the bearish notes from other metals, the tin price played a different tune. The LME three-month tin price closed January up 14.16% month over month, settling at $23,140 per metric ton at the end of last week.

Want MetalMiner directly in your inbox? Sign up for weekly updates now.

US housing starts rise in December

Speaking of the copper price, copper is used in a variety of applications in homes, from copper wiring to plumbing systems.

US privately owned housing starts rose 5.8% in December from the previous month, the Census Bureau and the Department of Housing and Urban Development reported.

Starts reached a seasonally adjusted annual rate of 1.67 million in December.

Read more

copper bars

Shawn Hempel/Adobe Stock

The International Copper Study Group (ICSG) reported the global copper market posted an apparent deficit of 480,000 metric tons through the first 10 months of 2020.

Global copper market in deficit, output down

In addition to the global copper market deficit, the ICSG reported global copper mine production fell by 0.5% during the aforementioned period.

Concentrate production did not change compared with the previous year, while solvent extraction-electrowinning fell by 2%.

The COVID-19 pandemic impacted copper mine production last year, particularly in April and May.

In Peru, the world’s second-largest copper producer, copper mine production fell by 14% during the first 10 months of 2019. Furthermore, from April-May, production fell 38% year over year.

However, Peru’s output recovered gradually, eventually coming in up 1.5% year over year in October.

Meanwhile, Chile, the top producer, saw output fall 3% from July-October, leaving output unchanged year over year for the 10-month period.

Mine production also fell in Australia, Mexico and the United States.

We know what you should be paying for metals — MetalMiner should-cost models are the ultimate savings hack by showing you the “should-cost” price for gauge, width, polish and finish adders. Explore what value they can add for your organization.

Refined copper production up 1.5%

Meanwhile, refined copper production rose by 1.5% during the 10-month period.

Read more

Steel production

buhanovskiy/AdobeStock

This morning in metals news: the U.S. steel sector’s capacity utilization rate hit 76.7% last week; the London Metal Exchange has proposed permanently closing its iconic Ring trading floor; and the copper price has trended flat over the past week.

Steel capacity utilization reaches 76.7%

The U.S. steel sector’s capacity utilization rate hit 76.7% for the week ending Jan. 16, the American Iron and Steel Institute reported.

Production during the week totaled 1.74 million net tons, up 1.7% from the previous week. The total, however, marked an 8.8% year-over-year decline.

More MetalMiner is available on LinkedIn.

LME proposes plan to permanently close historic trading Ring

The LME has proposed permanently closing its historic trading “Ring,” the Financial Times reported.

As the Financial Times notes, trading in the Ring came to a halt last year as a result of the coronavirus pandemic.

Copper price trends flat

The LME three-month copper price has trended flat over the last week.

The price closed Tuesday at $7,992 per metric ton after briefly edging over the $8,100 per metric ton threshold earlier this month.

Over the last month, the three-month copper price is up 1.7%.

Volatility is the name of the game. Do you have a steel buying strategy that can handle the ups and downs?

1 2 3 4 5 151