Copper prices increased on the Comex in New York, trading at $4.84 per pound, up 0.22%. On the London Metal Exchange (LME), copper rose by 1.77%, reaching $10,532 per ton. Investors are closely monitoring U.S. interest rate outlooks and supply concerns amid rising demand for the metal.
Macroeconomic data, such as the Fed’s preferred inflation measure, the PCE deflator for April, and the preliminary Eurozone consumer price index for May, are key focuses for investors this week. These indicators will help assess the European Central Bank’s interest rate decisions ahead of next week’s meeting.
The Fed’s meeting minutes released last week suggest maintaining the current benchmark interest rate, with discussions about potential future increases. Market skepticism is growing regarding significant U.S. interest rate cuts in 2024, with the CME FedWatch Tool indicating a 62% probability of a rate cut by November.
“Investors are focusing on U.S. inflation data to determine the timing of interest rate cuts,” said Satoru Yoshida, a commodity analyst at Rakuten Securities.
ANZ analysts noted that supply shortages are supporting copper prices this year. The International Copper Study Group (ICSG) lowered its forecast for excess supplies due to lower-than-expected production. Last November, First Quantum Minerals halted production at its Cobre Panamá copper mine following a Supreme Court ruling and nationwide protests. Anglo American announced plans to reduce copper production in 2024 and 2025 to cut costs.
Citi’s report remains bullish on copper, projecting prices could reach $12,000 per ton and possibly $15,000 per ton in the next 12-18 months. The bank’s baseline scenario expects copper prices to consolidate over the next three to six months, with potential for further gains depending on the extent of monetary easing by the Fed and the global manufacturing recovery. 
