© Reuters. Artisan miners work in an area where other hundreds of artisan miners have found a rich seam of copper in the hills of Tapairihua in Peru’s Andes, October 18, 2022. REUTERS/Marco Aquino/File Photo

By Polina Devitt

LONDON (Reuters) – Reduced supply from major producers Panama and Peru may flip the global copper market into a deficit from surplus in 2024 or at least tighten oversupply if the disruptions are not resolved in coming months, analysts said on Tuesday.

Panama’s top court on Tuesday ruled that Canadian miner First Quantum (NASDAQ:)’s contract to operate the Cobre Panama mine there is unconstitutional, while a union representing half of the workers at Peru’s Las Bambas mine went on strike.

If the Cobre Panama mine were to be permanently shut, then the market could easily move into deficit in 2024, said Macquarie analyst Alice Fox.

However, if it is out of operation only until Panama’s May 2024 presidential election, it would mean a loss of around 40,000 tons of copper this year and 160,000 tons next year, according to her estimate.

“This could result in a small deficit this year but the market should be able to absorb the loss next year and remain in surplus, albeit a smaller one. This could provide some support to prices next year,” she added.

Benchmark copper on the London Metal Exchange rose 1.4% to $8,480 a metric ton by 1721 GMT. [MET/L] Reuters’ November poll of analysts forecast an oversupply at 302,500 tons of copper in 2024.

Bank of America’s 2024 base-case scenario sees the global copper market surplus at 150,000 metric tons, said analyst Michael Widmer. That includes 370,000 tons from Cobre Panama, 200,000 tons of production increase from Las Bambas and incorporates a 6% disruption allowance.

“So losing any of these tonnages might well take us closer to a deficit,” Widmer said.

Copper, used in power and construction, is widely expected to benefit from the green energy transition in coming years, however it is up just 1.2% so far in 2023 amid patchy post-pandemic recovery of top metals consumer China and concerns about economic growth elsewhere.

“Participation in the copper market has been slim. This could be the trigger for some longer-term investors to come in, especially given the deficit calls for the back half of this decade are now being brought forward,” said Al Munro at broker Marex.

Read the full article here

Share.

Leave A Reply

Your road to financial

freedom starts here

With our platform as your starting point, you can confidently navigate the path to financial independence and embrace a brighter future.

Registered address:

First Floor, SVG Teachers Credit Union Uptown Building, Kingstown, St. Vincent and the Grenadines

CFDs are complex instruments and have a high risk of loss due to leverage and are not recommended for the general public. Before trading, consider your level of experience, relevant knowledge, and investment objectives and seek financial advice. Vittaverse does not accept clients from OFAC sanctioned jurisdictions. Also, read our legal documents and make sure you fully understand the risks involved before making any trading decision