Copper is the third most widely used metal and plays a crucial role in energy transition, particularly in the fields of electrification and renewable energy. The recent market trend, especially China's stimulus measures, has led to significant fluctuations in copper prices, making its future full of uncertainty.

On October 28th, metal analyst Jennifer L reported that copper futures fell to around $4.31 per pound on Monday after rising in the first two trading days. This decline was driven by the strengthening of the US dollar and the rise in the yield of US treasury bond bonds, because the elasticity of the US economy has weakened the hope of the Federal Reserve to cut interest rates significantly.

The global copper supply is facing challenges, especially with production setbacks in key regions. The major event affecting supply was the fire at Freeport McMoRan Inc.'s Manyar smelter in Indonesia, which resulted in the delay of the smelter's operation until early 2025. This event resulted in an adjustment of the forecast for the deficit in the concentrate market.

Other production challenges include reduced production from some major smelters in Asia, further tightening of concentrate supply.

Therefore, the expected shortage of copper in 2024 is 52000 tons, and the gap is expected to reach 84800 tons by 2025.

Despite these supply disruptions, the processing fee (TC) for copper concentrate may remain at $35 per dry ton until 2025. This indicates that the tight supply of concentrate will continue to exist, which may put upward pressure on the profits of smelters.

The prosperity of electric vehicles has boosted copper prices, but buyers insist on waiting for better prices.

According to BHP's data, global copper demand is expected to increase by approximately 70% and reach over 50 million tons per year by 2050. The average annual growth rate of trading volume will reach 2%.

Looking ahead, experts predict that copper prices will continue to be under pressure due to the current supply-demand balance. However, the potential increase in lower price orders and seasonal demand may provide support for prices.

It is expected that the concentrate market will tighten by 2025, with a shortfall of 84800 tons. Conversely, this may help stabilize the price at around $9825 per ton. Despite the current challenges, the outlook suggests that the copper market is cautiously optimistic and continues to fluctuate.

LME copper daily chart