Copper prices could increase to $5,621/mt by the end of 2020, a 5.6pc rise over 2019, according to the latest outlook from Bank of America.
The bank, which gave its outlook in a May 29 note, kept next year’s copper price forecast unchanged at $6,250/mt. In the note, the bank reasoned that although the COVID-19 pandemic has resulted in declining demand for the red metal, prices could rebound as production and manufacturing activity in have China increased.
The note, questioning an estimated 18pc drop in copper consumption in 2020, indicated that such a significant decrease in purchases were “unrealistic” with the easing of lockdowns across the globe likely to “facilitate a rise in raw material purchases,” even though western consumption would remain below Chinese consumption.
In another report, ING pointed out copper demand relied on traditional sectors, such as transportation and construction, with the latter being a bright spot across China and other economies where lockdowns have been easing.
The red metal’s prices rose by 3.6pc last month, but were lower than the 4.8pc gains seen in April, the report indicated. Additionally, physical demand for the metal was strong in China, despite a bearish outlook from commodity traders on the Comex market, which could likely support higher prices as global markets and mines reopen for business.