The Ultimate Guide to Copper Investing in 2024: UBS Analysts Predict a Market Rebound
In a recent report by UBS Global Research, analysts suggest that the recent dip in copper prices could present a unique opportunity for investors. Despite challenges in the global economy, the long-term outlook for copper remains strong, with a potential market tightening expected in late 2024 and into 2025.
The copper market saw a correction earlier this year, driven by speculative unwinding rather than fundamental weakness. As prices dropped, speculation played a significant role in the market dynamics. UBS predicts that copper prices could test support levels near $8,500 per ton, signaling a potential further decline of about 5%.
While there are no immediate triggers for a swift market tightening or price rebound in the third quarter of 2024, UBS remains cautiously optimistic about a potential market tightening by late 2024. This makes the current levels an attractive buying opportunity, especially if prices dip to the $8,000-$8,500 range.
On the supply side, UBS maintains a conservative outlook for 2024, anticipating minimal growth in global mine supply. Major copper miners have either lowered their production forecasts or are guiding towards the lower end of their ranges for the year. Looking ahead to 2025, UBS anticipates only modest supply growth driven by the ramp-up of major projects.
Despite weaker-than-anticipated demand, particularly in China and Europe, UBS expects demand to eventually rebound driven by restocking, improved sentiment, and the global shift towards renewable energy and infrastructure development. These factors, combined with constrained supply, are likely to support elevated copper prices over the long term.
In conclusion, the current market conditions present a compelling opportunity for investors to consider copper as a medium to long-term investment. With the potential for a market rebound in late 2024 and into 2025, now could be the perfect time to capitalize on the future growth prospects of this essential commodity.