Commodity Roundup: BMI ups copper price forecast to $9,600; oil steady after selloff

BMI (a unit of Fitch Solutions) increased its 2024 copper price forecast from $9,200/tonne to $9,600/tonne, as prices continue to be led by investor sentiment that is tilted towards a rate cut by the U.S. Federal Reserve in the third quarter.

Copper has pulled back since surging to a record $11,100/ton in May, as soft market conditions in China have slapped bullish investors with a reality check, and prices have continued to decline even after tentative signs of a demand recovery.

“While U.S. dollar weakness will continue to propel copper prices higher in the second half of 2024, as we had anticipated, Mainland China’s property market downturn will be a major drag, placing a cap on price growth,” BMI said in a note dated July 9.

Furthermore, BMI expects Mainland Chinese copper demand to grow by 3.5% y-o-y in 2024 compared to a 5.0% y-o-y rise in 2023 as China’s construction sector, critical for metal prices, remains in the doldrums. Outside Mainland China, a subdued growth outlook persists, limiting demand growth for most metals, including copper, the brokerage added.

In the longer term, BMI expects prices to reach $17,000/tonne in 2033, as the structural deficit persists due to a strong demand outlook as the green transition accelerates.

Potentially relevant stock tickers include (FCX), (SCCO), (TECK), (BHP), (RIO), (VALE), (ERO), (OTCPK:CSCCF), (OTCPK:FQVLF), (OTCPK:GLCNF), (OTCPK:GLNCY), (OTCQX:AAUKF), (OTCQX:NGLOY)

Elsewhere in the commodities market, oil prices held steady after falling in the previous session on signs that the Texas energy industry came off relatively unscathed from Hurricane Beryl. Oil and gas companies restarted some operations on Tuesday.

Brent futures (CO1:COM) were up +0.18% to $84.81 a barrel, after falling 1.3% in the previous session. U.S. West Texas Intermediate (CL1:COM) crude edged up +0.22% to $81.59 a barrel, after falling 1.1% on Tuesday.