Copper price to fall to $7,000 in second half of 2023, says Antaike

Global copper prices are set to fall to $7,000 per tonne in the second half of this year, predicted influential Chinese research firm Antaike, as rising risks of recession and a lack of solid demand growth in China weigh.

Copper prices rallied to a seven-month high of $9,550.50 in mid-January, thanks to bullish bets on prospects of a Chinese economic recovery, but the benchmark contract on the London Metal Exchange CMCU3 fell below $8,000 a tonne last week, the lowest since November.

Contracting manufacturing activity and slumping industrial profits in China have turned investors bearish.

The country consumes about half of the world’s copper and the metal, used in construction and power, is often viewed as an economic bellwether.

“Most sectors except air conditioning and solar are subdued,” said state-backed Antaike in a report last week.

Citi and Goldman Sachs forecast copper prices to fall to $8,000 and $7,750 a tonne respectively in three months, according to their latest forecasts.

Financial market turmoil in the West is also weighing on sentiment, with the Federal Reserve’s interest rate hike path and U.S. debt ceiling negotiations being closely watched.

Copper briefly fell to $7,000 in mid-July last year before recovering, and was at around $8,237 on Thursday.

Antaike said it expects growth of 2.7% in Chinese copper demand this year, while negative growth outside China is very likely.

Low stocks of the metal will however add some support, Antaike added.

Other Chinese analysts are also bearish on the metal.

“Copper prices will fall further to $7,500 or lower due to a lack of demand and persistent macro pressure,” Zhang Weixin, an analyst at China Futures, said on Wednesday.

Copper often provides an indication of economic performance in three to six months time, Luo Xufeng, the chairman at Nanhua Futures 603093.SS, told Reuters in an interview earlier this month.

“Higher interest rates have increased the costs of trading and warehousing for participants, translating into great pressure to the metals market,” Luo said.
Source: Reuters (Reporting by Siyi Liu and Dominique Patton; editing by John Stonestreet)