Copper prices climb to 2024 high as Citi signals bull market

Supply fears and soaring demand both lead to copper price surge in April

Copper prices jumped to their highest levels in 15 months in April, with analysts anticipating that the commodity’s rally will persist further on concerns over supply and heightened demand for metals critical to the energy transition.

As of Friday morning in New York, copper futures for May delivery were trading at $3.3505 — exceeding price levels last seen in January 2023. On Wednesday, the three-month copper price on the London Metal Exchange saw a 0.6% increase to $9,477 per metric ton, which later subsided to $9,342 as of Thursday close.

Copper demand is often seen as an indicator of global economic vitality, given its essential role in the infrastructure of renewable energy — including the manufacture of electric vehicles, power grids, and wind turbines.

Multiple Wall Street banks are bullish on the outlook for copper prices through to the end of the year.

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Citi analysts see copper price at $10,000 per ton by year-end

This week, Citi analysts said they believe this century’s second copper bull market is currently underway — roughly two decades after the first such cycle.

On Monday, Citi projected that copper prices are set to rise in the coming months, with expectations to average around $10,000 per metric ton by year-end and climbing to $12,000 by 2026, according to the bank’s base-case scenario.

In a research note cited by CNBC on Wednesday, analysts at Citi wrote:

“Explosive price upside is possible over the next 2-3 years too, if a strong cyclical recovery occurs at any time, with prices potentially rising more than 2/3rds to $15k/t+ in this, our bull case scenario”.

“Our $12k/t base case assumes only a small uptick in cyclical demand growth over the course of 2025 and 2026”.

Bank of America points to copper supply crisis, raises year-end target

In a separate take, analysts at Bank of America cited by CNBC raised their 2024 price target for copper to $9,321 — up from its previous forecast of $8,625.

Another report by MarketWatch quoted the bank’s metals strategist Michael Widmer raising its copper price forecast to $10,250 per ton by Q4 2024.

On Monday, the Wall Street bank wrote that copper was at the “at the epicentre of the energy transition, which means that the lack of mine supply growth is being felt acutely.”

In another research note cited by CNBC, analysts at BofA wrote:

“Tight concentrates availability is increasingly capping production at China’s smelters and refiners, potentially pushing consumers of refined metal back into international markets”.

“At the same time, demand in the US and Europe should bounce back as economies bottom out; this, along with rising demand from the energy transition, will likely move the copper market into deficit this year.”

BMO Capital Markets skeptical of copper price rally, says “commodity markets always self-solve"

However, not everyone on Wall Street is convinced that copper prices will hold onto their projected gains this year. Colin Hamilton, commodities analyst at BMO Capital Markets, told CNBC’s “Street Signs Europe” on Tuesday:

“Commodity markets always self-solve. They always find ways of softening things out. If we can’t solve from the supply side, well guess what, we’ll hurt demand and that’s what inflation naturally does. That’s why we had underperformance for much of the past year”.

“So, if copper gets say to let’s say four times the aluminum price, you would tend to see a bit of switching and substitution. I see some very high copper price targets out there: we could reach them temporarily, but then you would see demand adjusting in key areas.”