A look back at copper trends in 2016, and companies to watch in 2017.
The copper forecast for 2017 is bullish — some say it’s because of Trump, while others say it’s more about supply and demand. Here we take a look at copper trends in 2016: how the red metal’s price did, and big news in the past year.
A look back at the copper price
2016 started with a price dip to a year-
low of $1.93/lb on January 19, but the red metal slowly gained back its bearings in the latter half of 2016, which also coincided
with the US presidential elections.
The US Geological Survey says that global copper production increased by 200,000 tonnes for a total of 18.7 million tonnes in 2015, despite reported production cuts from major miners.
By August 2016, copper prices were up about 2 percent overall, trading at $2.16 per pound. In the same period, Goldman Sachs was warning investors about a “supply storm” for copper, and stated in a note that the company’s estimates suggest “copper is entering the eye of the supply storm,” and further said that the wall of supply
would translate to an increase in copper smelter and refinery charges thus affecting refined copper production.
But in December, the investment bank giant dramatically turned bullish on copper, contributing the change in sentiment to improved supply and demand fundamentals.
Scotiabank, in a note to investors in December said the fourth quarter of 2016 “has been great for copper and we think this new-found positive sentiment will carry into 2017.” The bank pointed out that more confidence in future metals demand is the big driver for this positive sentiment. The note further said that supply disruptions could be a potential factor in 2017, “there are big labor negotiations in December and into early 2017 at some of the world’s largest copper mines,” the bank stated.
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