Copper Prices Hold Steady Amid Global Market Volatility
Copper prices have held near their four-week high of $13,700/t as global stock markets experience a downturn. The price surge is partly due to ongoing conflicts in the Middle East and supply chain disruptions caused by storms in Chile.
The US paused its air strikes on Iran last Friday, which helped calm tensions in the region. As a result, Brent crude oil prices fell to $86.3/bbl from $90.3/bbl, easing inflationary pressures that had been driving expectations of rate hikes.
However, concerns about copper supply are still lingering. The International Energy Agency (IEA) now predicts a 25% gap between demand and supply by 2035, down from its previous estimate of 30%. This improvement is attributed to the expansion of existing mines rather than new discoveries.
The IEA's revised forecast comes as smelting capacity becomes a weak link in the copper supply chain. Smelters are shutting down due to zero fees for processing copper, leading to production cuts.