Copper has seen a sharp surge in prices on the back of higher demand.
The copper price is expected to continue the upward trend in the coming months amid falling inventories worldwide, particularly in China, according to a research note by investment bank UBS released on Monday.
The market conditions have prompted the company to raise its copper forecasts from $10 000 per million ton to $12 000 per million ton for end December and end March respectively. Prices are thereafter expected to level off as power issues fade and supply clarity emerges.
“Given the risk power curbs present to refined copper supply, we are raising our copper forecasts to $12 000/mt for the coming quarters followed by some levelling off,” it said.
Copper has seen a sharp surge in prices on the back of higher demand, and the metal is up 18% this month on the potential hit to refined copper supply from high energy costs and power cuts.
“Physical premiums for copper have spiked across regions alongside falling exchange inventories globally … in October alone, exchange inventories have dropped by almost 70 000 tons to only 279 000 tons,” said the note.
While there are sufficient global stocks for now, the latest inventory dynamics and lack of metal availability are worrisome, it noted.
The metal had opened at $9 970.65 on Monday.
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