{"id":2116,"date":"2024-04-12T06:23:01","date_gmt":"2024-04-12T06:23:01","guid":{"rendered":"https:\/\/vinacopper.com\/?p=2116"},"modified":"2024-04-12T06:24:37","modified_gmt":"2024-04-12T06:24:37","slug":"want-clues-as-to-whats-going-on-in-copper-look-to-china-for-signs","status":"publish","type":"post","link":"https:\/\/vinacopper.com\/en\/want-clues-as-to-whats-going-on-in-copper-look-to-china-for-signs\/","title":{"rendered":"Want clues as to what&#8217;s going on in copper? Look to China for signs"},"content":{"rendered":"<header>\n<div class=\"tags\">\n<p>Copper hit an 11-month high this week, propelled by a lack of supply coming out of Chinese smelters and a surge in bullishness in international markets.<\/p>\n<p>The metal&#8217;s price hit a new 52-week high of $9,089 a ton on the London Metal Exchange, rallying from a low of below $8,000 as recently as October on mixed economic indicators from China.<\/p>\n<p>The metal has gained more than 10% since the middle of February, driven by concerns over supply disruptions at mining and smelting facilities, and a generally optimistic outlook for the global economy.<\/p>\n<p>In a sign of robust demand, the total number of outstanding contracts for copper on the Shanghai Futures Exchange hit a record high of over 500,000 since last week as investors increased their appetite for the key metal.<\/p>\n<p>A lack of unrefined\u00a0supply from copper mines is often cited as the driving force in the supply\/demand equation, but it\u2019s not the only part of the story, especially right now.<\/p>\n<p>The type of copper that trades international markets like London and Shanghai is refined copper \u2013 and it\u2019s a lack of that type of copper that is pushing up prices right now.<\/p>\n<ul>\n<li><strong><a href=\"https:\/\/www.bnnbloomberg.ca\/commodities\" target=\"_blank\" rel=\"noopener\">Top commodities headlines, all in one place<\/a><\/strong><\/li>\n<\/ul>\n<p>As the world\u2019s biggest producer and consumer of refined copper, China has an outsized impact on the copper market, and the situation in the country is at the forefront now.<\/p>\n<p>Chinese smelters are grappling with reduced treatment and refining charges \u2014 fees earned for transforming concentrate into metal \u2014 while also having to deal with supply disruptions at international mines, and increased capacity at domestic rivals.<\/p>\n<p>In the first two months of this year, China produced 2.2 million tonnes of refined copper, equal to about 37,000 tonnes a day. That\u2019s down from the record setting pace of 38,000 set in November, and experts say the pace is set to further decline at smelters who currently produce half the world\u2019s supply of the red metal.<\/p>\n<p>Key Chinese copper smelters are poised to deliberate on their production strategies in an upcoming quarterly meeting, spurred by that significant downturn in processing fees.<\/p>\n<p>The gathering, which will see participation from leading firms such as Tongling Nonferrous Metals Group Co. and Jiangxi Copper Co., is scheduled to take place in Shanghai next Thursday, according to Bloomberg.<\/p>\n<p>\u201cTypically, smelter charges have been on the order of $60 to $80 a ton, historically, and recently, we&#8217;ve seen them drop down as low as $10 a ton.<\/p>\n<p>Now they&#8217;ve gotten together to come to an agreement that they&#8217;re going to curtail their purchases from mines to try and elevate treatment charges and become more profitable themselves,\u201d said Stefan Ioannou, mining analyst at Cormark Securities. \u201cThe ripple effect is, it now creates a supply deficit of refined copper. And that&#8217;s the copper that end users are looking to buy. And so obviously, with a lack of refined copper, the copper price goes up.\u201d<\/p>\n<p>Looking past the short-term price dynamics, the long-term forecast for copper remains attractive since it is a key metal in the supply chain for the green energy revolution underway.<\/p>\n<ul>\n<li><a href=\"https:\/\/www.bnnbloomberg.ca\/app\" target=\"_blank\" rel=\"noopener\"><strong>The information you need to know, sent directly to you: Download the BNN Bloomberg App<\/strong><\/a><\/li>\n<\/ul>\n<p>The International Energy Agency projects that total global copper demand could be between 30 and 60 per cent higher in 2040 than it was in 2022. But despite that demand forecast, there is less investment being targeted toward bringing new supply online.<\/p>\n<p>\u201cCopper production takes a long time to bring online,\u201d said Reid I\u2019Anson, senior commodity analyst at Kpler. \u201cThe expectation that you can just bring on and off supply is not really there like it is in other commodity markets, like oil.\u201d<\/p>\n<p>For those companies that are currently mining copper \u2013 or in the process of developing new mines \u2013 the current tight supply situation is a recipe for higher stock prices. \u201cWhen you look to the longer term macro there&#8217;s definitely space for these stocks to move a lot higher in tandem with a much higher copper price,\u201d said Mr Ioannou. \u201cAll these stocks are doing well right now because of the copper price. They\u2019re producers, so they&#8217;re benefiting from that today.\u201d<\/p>\n<\/div>\n<\/header>\n<div class=\"article-text\">\n<p>&nbsp;<\/p>\n<p><strong>From : bnnbloomberg.ca<\/strong><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Copper hit an 11-month high this week, propelled by a lack of supply coming out of Chinese smelters and a surge in bullishness in international markets. The metal&#8217;s price hit a new 52-week high of $9,089 a ton on the London Metal Exchange, rallying from a low of below $8,000 as recently as October on [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2116","post","type-post","status-publish","format-standard","hentry","category-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/vinacopper.com\/en\/wp-json\/wp\/v2\/posts\/2116","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vinacopper.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vinacopper.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vinacopper.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/vinacopper.com\/en\/wp-json\/wp\/v2\/comments?post=2116"}],"version-history":[{"count":0,"href":"https:\/\/vinacopper.com\/en\/wp-json\/wp\/v2\/posts\/2116\/revisions"}],"wp:attachment":[{"href":"https:\/\/vinacopper.com\/en\/wp-json\/wp\/v2\/media?parent=2116"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vinacopper.com\/en\/wp-json\/wp\/v2\/categories?post=2116"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vinacopper.com\/en\/wp-json\/wp\/v2\/tags?post=2116"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}