Online Export Import Data Search

Recent Searches: No Recent Searches
Complete Training Video : Click Here

Copper set for lifetime highs; EVs, renewables likely to be key drivers

Date: 23-04-2021
Subject: Copper set for lifetime highs; EVs, renewables likely to be key drivers
Base metals have been on the rise since April 2020 with many of them seeing momentum continuing. However, some intermediate speed bumps are also on the way. The entire non-ferrous metals complex has seen a persistent rally with gains to the tune of 30-80 per cent in the last 12 months.

The swiftest and consistent move has come in copper, backed well by a host of fundamental factors.

Copper has rallied close to 80 per cent from its lows registered in March 2020, and is up over 10 per cent so far in 2021. Its prices did take a breather over the past few weeks after a massive run, and last week, the metal only seemed to be getting its mojo back.

Calendar 2021 may prove to be a transformative year for copper. Inflation expectations are rising, and global economic activity recovering, with demand from China, in particular, returning at a rapid pace. These short-term fluctuations are important to consider but are not the whole story.

Supply side
The rally is largely supported by expectations of increasing demand and likely lower supply. Lack of mine supply is squeezing copper smelters, Chinese ones in particular, thereby leading many of them to take maintenance downtime. A collective pause may bite the refined metal market in the short to medium term.

Another driving factor is Chile, which closed its borders amid the resurgence in Covid-19 cases that worsened supply concerns in an already tight market. Chile's copper output decreased 1 per cent in 2020, whereas production in Peru fell 12.5 per cent. The unrelenting nature of the pandemic remains a persistent threat to copper miners. A collapse in treatment and refining charges (TC/RC) reflects underperforming mine supply as evinced by exports from Chile and Peru.

Demand side
The rapid adoption of electric vehicles, 5G technology and solar panels, which were the distinctly favourable themes last year, are likely to be the key drivers this year as well. EVs require four times more copper than petrol-powered cars. Besides, there is a need for more infrastructure facilities to connect charging stations to the grid.

China’s January-March copper imports climbed to the highest first-quarter levels since 2008, on rising demand and easing of logistical issues. Higher concentrate imports came amid rising smelter productions that require raw material feeding. Copper concentrate imports are seen growing for the rest of the year, while refined copper import growth could face pressure. The demand-supply imbalance will prop up copper prices, which bodes well for miners.

Macro data point out a robust demand scenario with China's manufacturing activity expanding at a faster-than-expected pace in March. Upbeat data on services PMI and non-farm payrolls have been fuelling optimism about robust US economic growth.

To top it up, the IMF has raised its 2021 global growth forecast to 6 per cent, up from 5.5 per cent in January, thereby boosting sentiments. US President Joe Biden’s $2 trillion infrastructure plan is one that could provide real fundamental demand for copper.

Looking out into the long term, demand for copper looks set to increase further. The rise of new industries like EVs and renewable energy, as well as the continuing traditional infrastructure needs in China and the US mean that demand for copper will likely persist well after Covid-19 disruptions subside.

The medium-term outlook on copper remains positive as demand is anticipated to improve on investments in EVs, renewable energy and infrastructure.

We expect the current momentum in prices to push copper towards the $9,450 level, and eventually make it register new lifetime highs above the physiological barrier of $10,000.


Infodrive India Pvt Ltd

Delhi :
  F-19, Pocket F, Okhla Phase-I
      Okhla Industrial Area

      New Delhi- 110020
   011 - 40703001

Kolkata :
  5th Floor Stesalit Towers,
      E-2-3, EP & GP Block,

      Sector-V, Salt Lake City,
      Kolkata-700 091
   033 - 71177191

INFODRIVE INDIA Copyright © 1996-2021 InfodriveIndia. All Rights Reserved.
Please read our Terms of Use and Privacy Policy before you use.

Get Sample Now

Which service(s) are you interested in?
 Export Data
 Import Data
 Exim Help