Copper Prices Rise Amid Supply Concerns and Inventory Declines

Current Market Dynamics

Copper prices experienced an uptick, climbing 0.6% to $8,537 per metric ton, as the market reacts to emerging supply concerns and declining inventories. This month, copper prices reached a 4-1/2-month high of $8,640 a ton, although trading volumes remained subdued.

Factors Influencing Copper Market

• Supply Uncertainties: Analysts are revising their surplus estimates for the upcoming year, with some predicting deficits. This shift is partly due to uncertainties over supplies from First Quantum's Cobre mine in Panama, which contributed 1% to last year's global mined supply.
• Production Guidance: Anglo American has reduced its copper production guidance significantly for the next two years, contributing to the supply anxieties.
• Inventory Trends: Copper stocks in LME warehouses have increased recently but still remain relatively low. A significant portion of these stocks is marked for delivery, indicating potential further reductions in warehouse inventory levels.

Aluminium Market Impact

• Aluminium prices experienced a slight decline, down 0.4% at $2,274 a ton. This decrease is attributed to a 15% rise in LME aluminium inventories over the past few days. The British government's sanctions on primary Russian aluminium imports are expected to contribute to further inventory increases.

Overall Market Sentiment

• The broader metals market is benefiting from a weaker U.S. dollar, making commodities priced in dollars more affordable for holders of other currencies.