Categories: Base Metals / Energy / General Market Commentary
Topics: General Base Metals / General Energy / General Market Commentary

US demand growth to push copper market into deficit

US demand growth to push copper market into deficit

The surge in the copper price to near 18-month highs following Donald Trump's win in the US presidential election came as a surprise to an industry under pressure since 2011 over growing supply.

Bullishness about the impact of Trump's $500 billion infrastructure plans has cooled down considerably since then, but at $2.6430 per pound ($5,872 a tonne) in New York on Monday the bellwether metal is up by more than a third in value since hitting near-six year lows this time last year.

The Chilean Copper Commission upped its price estimates for this year and 2018 from its previous forecast in a report released on Monday, but the government forecaster for the world's top exporting country, still sees copper averaging below today's ruling price.

After contracting in 2016, US copper demand will grow 2.5% this year, offsetting slower growth in China US demand growth to push copper market into deficit 

Cochilco said it projected average copper prices of $2.40 per pound in 2017, up from its prior estimate of $2.20, citing expectations that proposed increased fiscal spending in the US will boost demand for the metal widely used in construction and manufacturing. Prices should improve further to average $2.50 per pound in 2018. The copper price averaged $2.21 in 2016.

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