Copper surplus to prevail in 2014; Expect strong recovery of copper market in 2016-'18: Macquaire

WASHINGTON (Scrap Monster) : In the recently published research report titled ‘Commodities Comment-Copper and the supply conundrum’, the commodities research major Macquaire forecasts that 2014-’15 will continue to remain as a surplus market. However, longer-dated story for copper market and prices remain robust, with a strong market recovery likely to happen during 2016-’18.

The global copper mine output grew 6.5% year-on-year in 2013. Latin American and African region were the major contributors to this growth, though every major region from around the globe played their role. However, Macquaire observes that there are initial signs that the growth rate is beginning to slow.

The mined copper supply from Chile grew substantially, beating the Macquaire forecasts. The total supply touched 5.78 million tonnes, despite Codelco reporting a flat year of production. According to analysis, copper concentrates from Chile and Peru now account for almost 50% of China’s imports.

Macquaire believes that the slowdown in copper mine growth will gain focus in H2 2014. However, the market is unlikely to face shortage of copper concentrates, mainly due to high stock levels at the Chinese smelters. The smelter output is projected to accelerate during H1 2014.

The global firm also sees a strong recovery for copper market and copper prices during 2016-’18.