Citigroup Foresees Further Surge in Copper Prices Beyond $10K Per Tonne

SEATTLE (Scrap Monster): The prices of copper have been on a dream run, surpassing $10,000 per tonne on Friday.

In a research note released yesterday, Citigroup analysts predicted that the prices are likely to retest those level, mainly driven by rising investor optimism over upcoming policies in China- the world’s biggest copper consumer.

The Third Plenum Policy Meeting scheduled to be held in mid-July this year is expected to announce further stimulus measures towards upgrading its renewable energy infrastructure. The proposed stimulus measures are expected to boost domestic property and grid investments, which in turn may lend support to copper prices in the near-term, Citigroup noted.

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According to Citi, the recent pullback in copper is mainly on account of weaker global manufacturing data and will only be temporary. Despite softening of cyclical demand for copper in June, the overall copper consumption for the initial six-month period reported 4% growth, over the previous year.

In the long-term, the copper prices are likely to rise further to touch levels of up to $12,000 per tonne, triggered by anticipated rate cuts in major global economies, the bank report said. It must be noted that copper prices had hit record high levels of over $11,000 per tonne during May this year.