Copper Emerges as Top Contender
At a recent seminar hosted by the London Metal Exchange (LME), copper emerged as the preferred base metal for 2024. An informal poll conducted at the event saw copper garnering 53% of the votes, indicating attendees’ belief in its potential for the coming year. This polling followed a sequence of presentations by analysts advocating for each of the LME’s traded base metals, as well as steel.
Tin followed as a distant second with 23% votes, while other metals saw interest between 4-9%.
Analysts Weigh In
Max Layton, an analyst from Citibank, expressed a short-term cautionary stance on copper. However, he anticipates a bullish trend in the longer run. Layton suggests that, once concerns over macro-economic growth recede, we might witness a surge in copper prices. According to his projections, LME copper prices could escalate to $12,000 to $15,000 per metric ton by 2025, a significant rise from the current $8,100. This potential price hike is linked to the anticipated boom in demand stemming from energy transition efforts, which mine outputs might struggle to match.
Aluminium’s Outlook
In contrast, aluminium’s prospects seem less promising. It only managed to secure 5% of votes in the poll. Jorge Vazquez from Harbor Aluminium consultancy pointed to a surge in production, particularly recycled output in China, as a reason for the bearish outlook on aluminium. He emphasized, “Supply is booming.” Vazquez further noted that the ongoing process of supply destocking hasn’t reached completion yet.
Harbor’s projections suggest aluminium supply expansions of 6.9 million metric tons in 2024 and 7.2 million in 2025. Notably, 79% of these projections for each year will be from secondary, or recycled, aluminium. As a benchmark, global primary aluminium production is projected to hover around 70 million tonnes in 2023.
