Global copper short-term outlook January 2024

Metal prices came under pressure over the first three weeks of January reflecting deteriorating investor sentiment amid concerns for the global economic growth outlook, soft Chinese refined copper off-take and a firming dollar, dragging the 3-month price to a low of US$8,245/t by 18 January. However, price action over the final week of January was dominated by a flurry of macroeconomic policy developments from China, the escalation of the conflict in the Middle East and the possibility of further EU sanctions on Russia. These factors, as well declining LME stocks helped to underpin LME price as have signs of stress emerging on the supply side, especially at Chinese smelters as TCRCs tumbled through the month. This has also encouraged the investor community back into copper. We maintain our view that the market will remain in a modest deficit in 2024 reflecting a slower pace of mine supply growth relative to robust demand gains and will result in refined metal stocks being drawn down.