Copper Market Forecast 2017-2019

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Bloomsbury Minerals Economics Ltd.
Article written by Peter Hollands(*) for Mining Trends

“According to Bloomsbury Minerals Economics’ (BME’s) calculations, from 2012 through 2016 Q3 there was a cumulative excess of production over consumption of 1.8 Mt: an average of 375 ktpy. Exchange stocks were essentially the same at the end of the period as at the start. Of the surplus, 1.3 Mt is understood to have gone into the Chinese and South Korean reserves, 0.25 Mt into essential working stocks (0.15 Mt into additional material in domestic and international transit and 0.1 Mt into stocks at producers and consumers). That left an estimated further stock build of 0.25 Mt, which is believed to be owned by the merchant and financial communities. Some of this material seems to be moved into and out of exchange warehouses at will. Prospectively, the period 2017 – 2019 had been expected to see much smaller surpluses: around 100 kt per year. For 2017 the substantial production losses at Escondida and Grasberg are likely in reality to yield a small deficit rather than surplus, but BME still expects small surpluses in 2018 and 2019. BME is forecasting a more enduring deficit starting in 2020, when prices are expected to average over $6,000. BME expects prices mostly to trade between $5,000 and $6,000 over 2017-19.”

(*) Peter Hollands / Bloomsbury Minerals Economics Ltd. /Member of the Metal Market Alliance