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Macroeconomic Challenges Dim Copper Prospects

Citation:世紀矿业信息网 Date:2016-7-22 15:48:57


A new report by Thomson Reuters GFMS says poor producer discipline, higher output and slowing demand growth from China will combine to depress copper prices for a fifth straight year in 2016.

 

The analysts are predicting that copper will fall back to an average price of $4, 850/t in nominal terms in 2016, hitting the bottom of its price cycle. However, they also expect that prices will improve beginning in 2017, as the global economy picks up some momentum. They see a 5% gain over 2016 to US$5,100/t, shrinking surpluses and a stronger upswing of 12.5% in 2018, to reach US$5, 738/t.

 

In real terms (2015 prices), however, the price would remain below US$5, 000/t in 2016, and would only see a positive turn by 2018.

 

The analysts see a 2017 surplus similar to 2016s 150,000 tonnes, and the market remaining in surplus to 2018, with demand growth countered by a pick-up in mine and refined production. The report says producers might be lulled into complacency by the current pause above earlier lows, which could set up copper prices to fall again.  

 

The reports base case scenario forecast three-year average moderate global gross domestic product growth of 2.7%.


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