A survey conducted by Reuters expects copper prices to decline in 2022 under pressure from weaker demand as rising interest rates it will slow economic growth while mines increase their supply.
In May 2021, the red metal hit an all-time high of $10,747.50 a tonne, fueled by pent-up demand as growth accelerated as lockdowns eased due to pandemic, and the market faced a supply shortage and declining inventories.
Since then, the malleable has remained relatively static, partly due to the slowdown in the growth of the main consumer, China.
“The return of supply, mainly from South America, will weigh heavily on copper prices in 2022,” Caroline Bain of Capital Economics told the prestigious agency.
The average forecast of 25 analysts predicts that the spot copper contract in the London Metal Exchange (LME) averages $9,370 per ton in 2022, 4.7% lower than the settlement price on Thursday, January 27.
Liberum analyst Tom Price said that “he expects that the main downward factor for the price of copper in 2022 will be the adjustment of monetary policy by the Federal Reserve (Fed) from the United States.
In fact, experts expect a copper market deficit of 37,000 tons this year and a surplus of 286,000 tons in 2023, compared to a surplus of 82,000 tons that the October survey had predicted for 2022.
aluminum crisis
The aluminum it is the best performing metal in London so far this year. It has gained 10% after hitting 13-year highs in 2021, largely thanks to production cuts in China and Europe due to energy problems.
The aluminum market is expected to drop by 609,000 tonnes this year, above the 396,000-tonne shortfall forecast in the October survey.
“We expect China’s power supply problems to continue through the winter heating season, but wetter weather from the second quarter should help alleviate power shortages,” said Berenberg’s Richard Hatch.
However, the shortage would already be reflected in the price, according to those consulted, so they believe that the spot aluminum of the LME reach an average of 2,780 dollars per ton in 2022, 10.8% less than the current price.
Increase in nickel supply
In January, the prices of nickel they have soared to more than $24,000 a ton, the highest level in more than a decade, due to booming demand for electric vehicles and falling inventories.
However, analysts expect LME spot nickel to average $19,921 a tonne this year, down 12.6% from its last close.
Costs could also come under pressure from increased supply from top producer Indonesia.
The world nickel market is projected to be in deficit by 17,000 tonnes in 2022, and to become in surplus by 34,000 tonnes next year.
Source: Larepublica
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