Copper rally pauses as Goldman forecasts record highs

LONDON: Copper paused near 10-year highs on Wednesday ahead of a policy announcement by the U.S. Federal Reserve, but analysts at Goldman Sachs joined others predicting a rally to record levels.

Benchmark copper on the London Metal Exchange (LME) was up 0.3 per cent at $9,884.50 a tonne at 1637 GMT after reaching $9,965 on Tuesday, the highest since 2011.

Prices have more than doubled since March 2020 as the world economy rebounds and the shift to greener, more copper-intensive energy raises the prospect of supply shortages.

“It is only a question of time before it exceeds the psychologically important $10,000 mark,” said Commerzbank analyst Daniel Briesemann, adding that the all-time high of $10,190 would be likely be breached shortly afterwards.

But he said the rally looked overstretched and a sharp correction was likely before copper rises further in the years ahead.

GOLDMAN: Goldman Sachs forecast copper would average $9,675 a tonne in 2021, $11,875 a tonne in 2022 and $12,000 a tonne in 2023.

CHILE: The threat of strikes at copper mines in Chile receded after the country allowed another drawdown in pensions, pleasing workers.

SUPPLY OUTLOOK: Ample supplies next year and in 2023 will keep the market balanced, but miners need to start investing in new capacity now to meet a pickup in demand growth.

TIN: LME tin was up 4.6 per cent at $28,400 a tonne after reaching $28,595, its highest since 2011. Supplies are short, with stockpiles in LME-registered warehouses at just 1,300 tonnes and the price of quickly deliverable metal shooting above the benchmark contract.

MARKETS/FED: World shares were near record highs and the dollar and global bond yields nudged higher. Markets will be watching for signs that the Fed will tighten policy in a statement due at 1800 GMT.

: The nickel market should see a small surplus this year, the International Nickel Study Group said on Wednesday.

OTHER METALS: Aluminium was up 0.3 per cent at $2,402.50 a tonne, zinc rose 0.2 per cent to $2,930.50, nickel added 2.6 per cent to $17,400 and lead was 0.1 per cent higher at $2,092.

About Author

Related posts

Oxford Biomedica lifts outlook as AstraZeneca ramps up vaccine output

AstraZeneca (NASDAQ:AZN) UP 0.62% AT 7944 Oxford Biomedica on Tuesday doubled the revenue expectation from its COVID-19 vaccine supply deal with AstraZeneca (NASDAQ:AZN) after the drug maker commissioned more batches from the company in the second half of 2021. Shares of the cell therapy firm, which has an agreement...

Read More

Toyota Motor powers to record high with cyclical shares back in demand

Toyota Motor (NYSE:TM) UP 1.98% AT 8819 Shares of Toyota Motor (NYSE:TM) touched a record high on Tuesday as investors flocked back to automakers and other relatively cheap cyclical stocks while ditching tech companies that shone earlier in the pandemic. Toyota’s shares rose as much as 2.6% to 8,869...

Read More