As of June 9, 2017, Comex copper had jumped up to $2.65 per pound. Cited causes were winter weather impact on Chilean mines and continued labor unrest at Freeport-McMoRan. Additionally, China increased imports of refined copper by 8.0 percent month to month. Comex copper returned to more familiar price ranges closing the week of June 12th at $2.57 per pound. The strong dollar explains much of this. Continued volatility and inconsistencies is expected to prevail in the copper market going forward. No clear direction today, but global economic and political factors in place could usher increases in the near term.
The worldwide refined copper balance for the first two months of 2017 indicates a surplus of around 150,000 tonnes mainly due to a (9.5) percent decline in Chinese apparent demand. China currently represents 47.0 percent of the world copper refined usage, according to the International Copper Study Group (ICSG). Outside of China, global consumption rose by 2.5 percent.
Another copper organization predicts a small deficit in global refined copper for 2017 and a broadly balanced market next year. The International Wrought Copper Council (IWCC) has completed its latest six-month review of the copper market and has forecasted copper demand to increase by 2.8 percent this year leading to a global deficit of around 277,000 tonnes.
Copper demand will surge with renewables. That’s the opinion of two separate analysts. A New York-based natural resources investment firm, Goehring & Rozencwajg Associates, expects electric vehicles, wind and photovoltaic solar farms to have a major impact on copper demand into the next decade. The firm has bet around 16.0 percent of its investment portfolio in copper. Global financial services giant UBS AG similarly believes that the electric vehicle market is about to reach a tipping point that will dramatically increase demand for copper, nickel and other metal. UBS AG calculates that global copper demand would grow by 21.0 percent, if 100.0 percent of the world’s vehicles were electric, although that scenario is highly unlikely in the foreseeable future.