SELL COPPER MCX TIPS TODAY FEB 610.30 SL 612 TGT 608.30/605 – MCX MONEY. Canaccord Genuity mining analysts expect Chinese stimulus to support copper demand in combination with an expected global economic recovery in 2021.
“We now expect copper prices to average $3.50/lb ($7716/mt) in 2021, an approximate 17% increase on our previous forecast of $3.00/lb ($6,614/mt),” Canaccord said.
In terms of copper supply, two aspects that are also hindering supply are the lower grade and deeper deposits as well as market appetite and availability of projects, Stifel Financial analysts said.
“Due to the cyclicality of the copper market, we have looked across the sector at mega projects currently board greenlighted to get a sense of downside price protection for the red metal. With a copper market in excess of 22 million mt Cu annually, only major projects (we define as those greater than 200,000 mt/year Cu produced) have the ability to materially swing the needle on the supply/demand balance,” Stifel said.
“Based in part on capital costs, operating costs, and a minimum acceptable return on investment, we estimate that current major projects require a minimum price in excess of $3.20/lb ($7,055/mt) Cu, globally.”