‘Bullish’ about copper in the medium term

Expectations of an oversupply of copper are unfounded and analysts are predicting a balanced 2015 for the industry. According to Vanessa Davidson, group manager of CRU Group, this will also be the case for 2016 and 2017 after which the market is expected to move into a deficit. “We don’t see a huge oversupply hitting the market caused by different projects commissioned and producing at the same time,” she said at the annual Mining Indaba in Cape Town. Giving insight into the copper industry, she said price forecasts were difficult to make at present thanks to the volatility of the market but expectations were that prices would reach a trough in 2015. “We see a bit of a recovery in 2016 and then we see bounce back starting. By 2017 we should see prices in excess of $7000 a tonne with average prices in 2018 around $8000 a tonne. We are very bullish about this metal in the medium term.” She said copper producers would have to stand strong for at least one more year before the market would see significant improvements. Copper mines have in particular been adversely affected by the lack of power in Africa which has driven up operating costs. With prices on a downward spiral since the beginning of the year, 2015 is expected to be a tough year for the industry.