Source: Wall Street
Author: bu Shuxin
The dawn of another bull market in commodities such as industrial metals seems to have emerged.
Since NovemberThe price of copper futures in London rose nearly 14%, while the price of aluminum futures in London rose by more than 11%. Iron ore has risen as much as 23 per cent in the past month, according to CEIC, a research firm.
It is widely believed that the sharp rebound in the price of basic metals such as copper is due to the recent peak of interest rate hikes by central banks around the world, especially the Federal Reserve, and China's continued optimization of epidemic prevention and control policies, which has greatly boosted investor sentiment.
Based on the above reasons, Goldman Sachs Group, the flag bearer of the commodity bull market, boldly predictedCopper prices could rise to a record high of $11000 a tonne within a year.
Goldman Sachs Group said in his latest report that China's replenishment demand may push up copper prices next year.Copper prices are expected to rise to an average of $9750 a tonne in 2023 ($8325 previously forecast) and an average of $12000 ($10750) in 2024.
Goldman Sachs Group also said that they expect copper supply to be in short supply in 2023 and then peak in 2024, when there will be a huge gap between supply and demand. The supply contraction mainly reflects a sharp reduction in expectations for global mine supply next year, with growth expected to fall by 1/3 in the past quarter to just 3.6 per cent.
Specifically, Goldman Sachs Group predicts that global copper inventories have fallen to their lowest level in 14 years, helping to limit the decline in copper prices. The bank expects a global supply shortfall of 178000 tonnes next year, compared with an earlier forecast of 169000 tonnes of oversupply next year.
Previous articles on Wall Street have also pointed out that global inventories of copper and other basic metals have fallen to the lowest level in nearly two decades, which will form a strong support for the price side.
But some investors remain hesitant about the short-term outlook amid the poor outlook for a global economic slowdown and a recession in the US.
Investors are frantically fleeing US real estate funds as the Fed continues to aggressively raise interest rates and rising interest rates continue to depress house prices, leaving the US real estate market as the demand side of the world's largest industrial metal.
In addition, although inventories of base metals have fallen sharply, some agencies believe that weak demand under the prospect of a recession could further dampen price rises. The bank believes thatThe supply of copper may have exceeded demand by now, and there was a glut of aluminium in the third quarter. A major recovery in demand is unlikely in the short term.
Edit / Jeffy