The copper market was much more oversupplied than expected in the spring – Commerzbank

The International Copper Study Group (ICSG) then followed with the release of its forecasts for the copper market, notes Commerzbank commodity analyst Carsten Fritsch.

Demand is expected to grow further next year

“ICSG has had to adjust its forecasts significantly upwards due to an already significant surplus in the first half of the year: it now expects a supply surplus of 470,000 tonnes; in the spring it had assumed another surplus of approximately 160,000 tons. This is largely due to significantly stronger output growth: instead of around 2%, global output (adjusted) is now expected to grow by 4.2%.

“On the one hand, this year’s losses are significantly lower than usual, and on the other hand, the Democratic Republic of Congo and China have further expanded their capabilities. At 2.2%, forecast demand growth is largely in line with spring expectations. Next year, demand is expected to grow even more: ICSG expects growth of 2.7% from 2024. At the same time, production growth is expected to lose significant momentum and reach only 1.6% .”

“Even if capacities continue to grow, the concentrate shortage would slow production expansion. As a result, ICSG expects a smaller supply surplus of just under 200,000 tonnes in 2025. However, this would be twice as large as expected in the spring and even slightly higher than previously expected for the year current. Even though these figures did not immediately manage to reduce the euphoria in the copper market, they cannot be ignored in the long term.”