{"id":3773,"date":"2023-12-28T01:41:22","date_gmt":"2023-12-28T01:41:22","guid":{"rendered":"https:\/\/economicherald.net\/?p=3773"},"modified":"2023-12-28T01:41:22","modified_gmt":"2023-12-28T01:41:22","slug":"ground-breakers-can-copper-really-be-the-new-oil","status":"publish","type":"post","link":"https:\/\/economicherald.net\/?p=3773","title":{"rendered":"Ground Breakers: Can copper really be the new oil?"},"content":{"rendered":"

Two years ago, Goldman Sachs called copper the \u2018new oil\u2019
\nBut prices have stagnated and fallen since hitting an all time high in May 2021
\nThe jury is out on whether the copper market will be oversupplied in 2024 amid a weakening Chinese property market<\/p>\n

\u00a0<\/p>\n

We\u2019re more than two years on from Goldman Sachs\u2019 call that copper will be the new oil<\/a> in the green energy transition.<\/p>\n

Since then prices have been volatile \u2014 wallpaper used by companies sensitive to the fears of investors for \u2018have gone down\u2019 \u2014 but have continued to threaten a breakout when the global economy turns around from 2023\u2019s rate rise nightmare.<\/p>\n

Having topped out at US$10,700\/t in May and then October 2021, the red metal is now fetching a little under US$8700\/t for three month delivery on the LME.<\/p>\n

At the moment the last prediction out of the International Copper Study Group was that a small deficit of 27,000t in 2023 would transform into a 467,000t surplus in 2024 as mined supply outpaces demand growth, the largest surplus in 10 years.<\/p>\n

Its figures for 2023 to date show a deficit of some 51,000t, though supply challenges including the forced closure of First Quantum\u2019s Cobre Panama mine in the Latin American country of the same name and lower production forecasts from Anglo American have given hope the market won\u2019t be flooded in 2024.<\/p>\n

Goldman Sachs now sees a deficit of over 500,000t in 2024, and is expecting a price uptick in the second half.<\/p>\n

Others aren\u2019t as bullish in the short term.<\/p>\n

ING\u00a0 sees a \u2018comfortable balance\u2019 in 2024, keeping a price outlook of US$8450\/t.<\/p>\n

But among the toughest critics is Martin Pradier, Veritas Investment Research materials sector analyst, who told Bloomberg<\/em> the downturn in China\u2019s residential real estate industry would continue to hurt copper prices.<\/p>\n

\u201cIf you look at the last 25 years, there was no growth for copper outside of China,\u201d he told BNN Bloomberg\u2019s Andrew Bell in a recent interview. <\/a><\/p>\n

\u201cOut of that, China\u2019s real estate accounts for about 25% to 30%. China\u2019s consumption is eight times bigger than the U.S.\u201d<\/p>\n

The canary in the coal mine for the demand and supply balance, he said, was the fact copper producer costs had outpaced price increases by 16% to 3% this year.<\/p>\n

\u201cIt shows you that copper was in a surplus situation because in any other market if your costs are going up 16% you try to pass that (on),\u201d he said.<\/p>\n

\u201cWhen you see that big difference between the cost and the price, that is telling you something.<\/p>\n

\u201cIn general I\u2019m negative. I think it will take next year, maybe another year more at least (for copper to turn around) because the importance of China is so big.<\/p>\n

\u201cChina was building half of the houses of the world one or two years ago \u2026 as that slows down obviously copper demand is going to slow down.\u201d<\/p>\n

READ: Ground Breakers: Bloomberg says we\u2019ll be starving for 6Mt of copper by 2032, but a supply glut now could make things tricky<\/a><\/p>\n

\u00a0<\/p>\n

And on the markets?<\/h2>\n

Whatever 2024 has in store, investors continue to be bullish on the mining sector in the here and now.<\/p>\n

Materials stocks are now up over 10% for the past month and are one of the top performing sectors in the ASX 200 over that time, with the sector containing the big large cap ressie names up almost 1% again this morning.<\/p>\n

Fortescue (ASX:FMG)<\/a> has bounded to a new all time high of $29.11 this morning to lead the movements, with Mineral Resources (ASX:MIN)<\/a> and Newmont (ASX:NEM)<\/a> also in the winner\u2019s circle.<\/p>\n

The ASX\u2019s top copper exposure Sandfire Resources (ASX:SFR)<\/a> is also up strongly and now boasts a 33% YTD rise despite relative timidity in copper prices.<\/p>\n

It has become the sole pure play copper stock of scale on the ASX in 2023 with OZ Minerals bought out by BHP and 29Metals (ASX:29M)<\/a> suffering from major production challenges.<\/p>\n

\u00a0<\/p>\n

Ground Breakers share prices today<\/h2>\n\n

<\/span>\u00a0
\n<\/span><\/p>\n

The post Ground Breakers: Can copper really be the new oil?<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

Two years ago, Goldman Sachs called copper the \u2018new oil\u2019 But prices have stagnated and fallen since hitting an all time high in May 2021 [more…]<\/a><\/p>\n","protected":false},"author":0,"featured_media":3774,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-3773","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"\nGround Breakers: Can copper really be the new oil? - Economic Herald<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/economicherald.net\/?p=3773\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ground Breakers: Can copper really be the new oil? - Economic Herald\" \/>\n<meta property=\"og:description\" content=\"Two years ago, Goldman Sachs called copper the \u2018new oil\u2019 But prices have stagnated and fallen since hitting an all time high in May 2021 [more...]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/economicherald.net\/?p=3773\" \/>\n<meta property=\"og:site_name\" content=\"Economic Herald\" \/>\n<meta property=\"article:published_time\" content=\"2023-12-28T01:41:22+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/economicherald.net\/wp-content\/uploads\/2023\/12\/GettyImages-1053752112-e1703727061749-wGIOXL.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"676\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=3773#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=3773\"},\"author\":{\"name\":\"\",\"@id\":\"\"},\"headline\":\"Ground Breakers: Can copper really be the new oil?\",\"datePublished\":\"2023-12-28T01:41:22+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=3773\"},\"wordCount\":681,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=3773#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/economicherald.net\\\/wp-content\\\/uploads\\\/2023\\\/12\\\/GettyImages-1053752112-e1703727061749-wGIOXL.jpeg\",\"articleSection\":[\"Finance\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/economicherald.net\\\/?p=3773#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/economicherald.net\\\/?p=3773\",\"url\":\"https:\\\/\\\/economicherald.net\\\/?p=3773\",\"name\":\"Ground Breakers: Can copper really be the new oil? 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