Copper prices are likely to stabilize in the coming quarters despite a recent surge in the red metal’s value, analysts have predicted.
Three-month copper futures on the London Metal Exchange (LME) broke the $6,000-a-ton threshold by the end of June — a far cry from its low of around $4,626.50 at the height of Covid-19 fears in March.
On Monday, three-month copper on the LME gained 1.2% to trade at around $6,088 a ton, Reuters reported.
However, according to experts at Citi, the metal — often seen as a bellwether for the general state of the global economy — could be overvalued going into the third quarter.
“The copper rally over the past month from $5,700 a ton to over $6,000 a ton has occurred against a backdrop of flat to falling equity prices and bond yields, leaving copper looking overvalued by $220 to $420 per ton based on these historical relationships,” analysts from the bank said in a note last week.