The copper value stays robust attributable to excessive demand, constrained provide and elevated funding in vitality transition tasks, BofA mentioned.
“Manufacturing exercise ought to stabilize because the Fed cuts charges, so we preserve our constructive copper view into 2025,” the analysts mentioned.
Copper costs have risen 6% year-to-date in 2024, pushed by tight mine provide and challenges in refining.
Learn extra: BHP warns AI growth would worsen copper scarcity
Moreover, spending on vitality infrastructure—particularly grid enlargement tied to decarbonization—has boosted demand. In China, grid investments have offset weaker demand from the housing sector, additional supporting copper.
Iron ore outlook
In distinction, iron ore faces challenges from declining demand, particularly in China’s property sector, the place consumption dropped from 50% in 2010 to twenty% in 2024 attributable to a authorities crackdown on speculative investments and a slowdown in housing building.
Metal manufacturing has additionally declined, and though sectors like equipment have helped, it’s not sufficient to counter the development downturn, in line with BofA.
Damaging metal mill margins in China have led to manufacturing cuts, whereas main exporters Australia and Brazil proceed to extend output, worsening the provision glut.
“With a surplus of 190mt, or 7.5% of complete provide anticipated for subsequent 12 months, this means that costs could fall beneath $80/t, to incentivize both the massive miners to cease including to provide or take a few of the greater value operations particularly in China out of the market,” the analysts mentioned.
Learn extra: Goldman Sachs cuts This autumn iron ore value forecast by $15/t on provide glut