Copper price crashes through $4 as bull case fades
Copper prices fell to their lowest in more than two weeks, as a stronger
US dollar made greenback-priced metals more expensive to holders of other currencies.
Copper for delivery in May was down 2.95% by midday, with futures touching $3.944 per pound ($8,676 a tonne) on the Comex market in New York.
Escalating tensions between China and the West, as well as potential US tax hikes hit sentiment and led to investors buying into safe-haven dollar.
“Renewed restrictions in Europe and other macro news are denting market sentiment,” ANZ analyst Soni Kumari told Reuters, adding that Chilean miner Antofagasta avoiding a strike at its Los Pelambres copper mine also pressured prices.
“Bullish underlying factors for copper have started to fade and we see this continuing into 2021,” said Fitch Solutions in its latest copper report.
“We are revising up our 2021 average copper price forecast to $7,250/tonne from $6,800/tonne as prices have pushed higher than previously expected. Although we were already positive on prices in the first quarter, the
rally has been stronger than we expected. However, we note that prices have edged lower since their late February high,” Fitch said.
The analyst sees prices “trending lower from current levels on a six-to-nine-month horizon.”
Trafigura, the world’s biggest copper trader, said on Tuesday it expects the metal to hit $15,000 a tonne in the coming decade as demand from global decarbonization produces a deep market deficit.
Even in the early stages of the covid-19 crisis, Trafigura Group was betting on the rebound that’s seen copper double over the past year to trade at more than $9,000 a tonne.
Now the commodities giant sees the metal soaring past record highs above $10,000 as western economies pull out of the pandemic and the green revolution takes hold, head of copper trading Kostas Bintas said in an interview.
