Supply low, demand high – copper

In the 2000s, it was primarily China’s urbanization and industrialization that drove up the price of the reddish metal. Then came the financial crisis and the price collapsed. In 2020, the price of battery metals and copper rose. Today, supply and demand are becoming increasingly imbalanced. This could lead to a new super cycle.

The overall costs (AISC) required to produce copper are also of interest. These are around USD 2.41 per pound of copper, which is favorable for mining companies that have copper in the ground. In the long term, demand for copper is likely to increase due to the energy transition. The uncertain supply situation should also cause prices to rise. The copper price was very high in May, which led to a boom in scrap deliveries. China’s scrap imports have risen sharply since the beginning of the year. However, the boom in scrap supplies is expected to slow down in the second half of the year. Copper has now become somewhat cheaper, meaning that scrap dealers are holding back their goods. This is because their stocks have already fallen significantly this year. And with a lower scrap supply in the third quarter of 2024, the supply of copper will also decrease.

Although the construction sector is likely to remain a headwind, this negative trend should come to an end as soon as China launches another economic stimulus program to boost the construction sector. After all, China accounts for around 20 percent of all construction investment. China’s economy is expected to grow by 4.6 percent in 2024, which is still a top figure internationally. The country will try to strengthen the important construction sector. Copper as a whole, and therefore companies with copper such as Mogotes Metals and Meridian Mining, should be able to look forward to a positive future.

Mogotes Metals is focused on the Filo Sur project (copper, gold, silver). It is located on the border between Chile and Argentina.

In Brazil, Meridian Mining – https://www.commodity-tv.com/ondemand/companies/profil/meridian-mining-uk-societas/ – has the Cabaçal (copper, gold, silver) and Santa Helena (copper, gold, silver and zinc) mines. Drilling is underway on both projects.

Current company information and press releases from Meridian Mining (- https://www.resource-capital.ch/en/companies/meridian-mining-uk-societas/ -) and Mogotes Metals (- https://www.resource-capital.ch/en/companies/mogotes-metals-inc/ -).

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