Commerzbank analyst Thu Lan Nguyen reports that copper's supply surplus has widened to approximately 300,000 tons in early 2024, as production increased while demand stagnated [1]. The bank notes that the supply surplus grew by more than 100,000 tons compared to the previous year during the first two months of 2024 [1]. In February, copper prices approached USD 13,000 per ton, which is nearly 40% higher than in February of the prior year [1]. This elevated price level coincided with a significant decline in demand during February, following a slight increase in January [1].
Commerzbank highlights that the rapid price recovery in recent weeks, combined with persistently high energy costs, is creating ongoing uncertainty and does not support a positive outlook for future demand trends [1]. As a result, the bank assesses that the further upside potential for copper prices is limited in the short term [1].
No specific market reactions or ticker symbols are mentioned in the article. The analysis is based on recent supply and demand data, as well as price movements and energy cost trends [1].
CONCLUSION
Commerzbank sees limited short-term upside for copper prices due to a growing supply surplus, weak demand, and high energy costs. The bank's analysis suggests that current market conditions are not supportive of a sustained rally in copper. Investors may need to temper expectations for further price gains in the near term.