A debate rattles on in the global copper market about whether a supply surplus will cap raging prices or whether a continued strain on supply will cause the red metal to keep accelerating.
With preliminary data from international metals groups stating that the global refined copper market was in a surplus in the first quarter of the year, some market players see a lid on the recent price rally.
The International Copper Study Group, or ICSG, reported on May 18 that preliminary data showed that the global refined copper market was in surplus by 24,000 tonnes in February, or 52,000 tonnes after making seasonal adjustments.
Revised data for January and February indicates a cumulative production surplus of 77,000 tonnes, or 117,000 tonnes on a seasonally adjusted basis, the report said.
At the same time, the World Bureau of Metal Statistics, or WBMS, reported a small surplus of 4,000 tonnes of copper in the first quarter of this year.
"When [the ICSG and WBMS] said that the copper market was in a surplus, that relieved some upside pressure on the market,'' said Jim Steel, senior vice president and metals analyst at HSBC Bank.
With those figures in the mix, the copper market appears to have shrugged off some recent bullish reports including news that the world's biggest copper producer, Corporacion Nacional del Cobre de Chile, or Codelco, expects its output of copper to fall through next year.
This year, copper output will drop to 1.71 million tonnes from 1.83 million tonnes last year, falling further next year to 1.65 million tonnes, Codelco said.
By 2020, the company hopes to mine 2.5 million tonnes. That is a drop from previous estimates of expanding output to 3 million tonnes by 2020.
"The market has gone up so sharply that it has already absorbed potential bullish news without making new highs," Steel said, adding that even though supplies may be tight there is concern that demand has reached a peak.
But the counter opinion contends that copper fundamentals are among the strongest in the complex.
Analysts say visible inventories are well below critical levels, forcing consumers to exit the market. They said they do not think the market can to return to a significant surplus in the next 18 months.
While demand remains strong, Goldman Sachs analysts said supply continues to face disruption, citing the ongoing strike at Grupo Mexico's La Caridad mine as well as a union's vote to authorize a strike at Falconbridge Ltd's Lomas Bayas operation in Northern Chile.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique