Over the past few days, the world’s copper traders and executives descended on Santiago for the annual Cesco Week gathering. The main debate: Is this the beginning of the big bull market everyone has been waiting for?
Nick Snowdon, the Goldman Sachs Group Inc. strategist who has carved out a place for himself as the market’s most bullish voice, argued copper’s latest developments are only “the foothills of what will be its Everest.” He forecasts prices will average an astonishing $15,000 per ton next year.“On a fundamental basis, the indicators suggest that the price has gone too far,” Alice Fox, commodities strategist at Macquarie Group Ltd., said in Santiago.
That is a function of supply disappointments as well as a breakneck expansion in global smelter capacity. The result is deals in which smelters and traders are paying roughly the same price for cargoes of copper ore as the copper contained in it will fetch when processed. The crunch point may come toward the end of 2024, when miners negotiate smelters’ fees under annual supply deals.