Copper: what to look for in 2016

During 2016 we are expecting a slight improvement in demand growth for refined copper from the disappointing performance seen in 2015. However, production from new mine projects and expansions will drive continued increases in supply, resulting in a modest copper metal market surplus. As a consequence, stocks of refined metal are forecast to rise during 2016 and the annual average copper price is forecast to be at a lower level than last year. This insight discusses the main risks to this forecast. Points that will be of particular interest as the year proceeds will be the outlook for copper demand in China and other emerging markets, the likelihood of further curtailments to mine supply due to disruptions and cost related closures and how deflation in the cost structure of the industry will affect the fundamental support level for the copper price.