| Katusa's Investment Insights | | Copper’s Wild Ride… Poised for a Breakout? | | | The “Trifecta of Influence” is leaving investors on the edge of their seats. | | Copper is the lifeblood of industrial growth and a bellwether for the global economy.
That’s why it’s often called Dr. Copper.
But lately, this “doctor” has been in the emergency room, with price swings that mirror an erratic heartbeat.
Still, it closed out 2024 up about 6% year over year, signaling some underlying resilience. | | Copper’s Price Drivers: China, the Fed, and Inventory Woes
To understand where copper might be headed in the near term, let’s break down the three biggest forces shaping its price: - China’s Struggles: China’s economy hit the brakes in 2024, with weak real estate demand, sluggish manufacturing, and rising geopolitical tensions. Copper imports—a key gauge of industrial health—softened, sending ripples through global markets. Though Beijing may introduce new stimulus, its timing and impact remain uncertain.
- The Fed’s Slow Moves: While the Federal Reserve has hinted at cutting rates in 2025 to stimulate the economy, it’s proceeding with caution. Historically, lower interest rates propel growth and boost copper demand, but a slower pace of cuts could delay any upward price momentum.
- Rising Inventories: Stockpiles of copper have climbed on both the London Metal Exchange (LME) and the Shanghai Futures Exchange (SHFE). Elevated inventories can act as a drag on prices until the market absorbs excess supply.
| | The Bigger Picture: Energy Transition Still Needs Copper
Despite short-term headwinds, the long-term outlook remains robust. Renewable energy infrastructure—electric vehicles, wind turbines, solar panels—relies on copper’s conductive properties. - By 2025, China’s smelting capacity alone is expected to reach 35 billion pounds, highlighting global ambitions for cleaner energy systems.
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Elon Musk’s new AI Company is set to dominate in Trump’s second term. Discover the #1 opportunity to profit BEFORE Trump gets sworn in. |  | | In 2024, China’s copper supply grew sharply due to a 6.5% increase in domestic production (13 billion pounds) and higher imports of refined copper (+16%, 4.19 billion pounds) and scrap (+18%, 2.65 billion pounds).
Chinese imports from the DRC surged 91% to 1.54 billion pounds, creating an oversupply. | | While the long-term case for copper remains strong, the near-term supply challenges are shaping the market in ways investors can’t ignore.
Current Copper Concentrate Market Update
The tightness in the supply of copper concentrate is due to several important factors. - Cobre Panama being shut down. A shutdown at Cobre Panama removed 660–770 million pounds (about 2% of global supply) from the market. Now, Panama’s new administration suggests the mine will soon restart. Once it’s back online, it’ll be among the world’s top 12 copper producers.
- SWAP Line Issues balancing out: Chile projected +4% growth in 2024, but this did not happen. Chilean production was weak throughout the year, state miner CODELCO’s output was the lowest in 25 years. CODELCO’s production fell 8.3% to 3.13 billion pounds. (To understand how important SWAP Lines are – click here)
Social issues in Peru plagued Anglo-American and MMG this past year, and this could continue in 2025.
Here’s how this affects the concentrate balance…
The gap between production and consumption shows an 880-million-pound deficit expected in 2025, growing to 1.3 billion pounds in 2026. | | The problem with such data and charts is that there seems always to be supply “waiting” to be delivered that has already been “hedged out” from new mine expansion production that satisfies this demand.
Also, if Russia and Ukraine conflict resolves itself in 2025, expect a flood of Russian copper to “meet any such deficits”.
How to Play a Tight Copper Market
Want to know exactly where to look to play a volatile copper market?
In our recent January issue of Katusa’s Resource Opportunities, we’ve identified the key players poised to benefit from this perfect storm.
One tiny player in a politically risky region has just scored a major legal win against a corporate giant.
With arbitration now behind them, all signs point to a massive buyout offer, and investors holding shares could see triple-digit returns. - This company is up as much as 35% in the last month
The second company, a thinly traded small cap is led by one of the most connected management teams in the industry… quietly building its portfolio in a region ripe for growth.
The market isn’t paying attention yet, but this explorer could deliver explosive gains once the news hits.
Third, there’s a global heavyweight—a pure-play copper powerhouse with world-class assets.
The share price is getting right into my target area for a buy.
The copper market is tightening, and these opportunities won’t stay under the radar forever.
Click here to get the full details and gain your edge in the copper market in just a few clicks.
Regards,
Marin Katusa | | | For Real-Time Market Alerts, Follow Us: | | | |
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