[Click here for an interactive chart of copper prices]
Copper is up 3% this month after rising 10.6% in November as expectations began to build that China will retreat from its zero-covid policies.
On Wednesday, the country dropped key parts of those rules.
Analysts at Goldman Sachs said they now expect copper to be undersupplied in 2023 and “peak supply is now immovably fixed in mid-2024 … generating deficits from that point.”
They said China may seek to rebuild depleted inventories next year, adding to copper demand, and predicted prices would average $9,750 a tonne in 2023 and $12,000 in 2024.
“A wave of new copper mine supply is washing through the market, with smelters reaping the benefits in higher treatment and refining charges (TCRCs),” wrote Reuters columnist Andy Home.
“Copper’s problem is the lack of visibility on where the next wave is coming from. Right now the horizon looks disconcertingly empty.”
(With files from Reuters)
