Fitch's BMI is optimistic about the boost to the US dollar in the second half of the year, raising the copper price expectation to $9600
Fitch's BMI has raised its 2024 copper price forecast to $9600 per ton, mainly due to market expectations of a rate cut by the Federal Reserve. However, copper prices will be limited by Chinese market demand. In the long term, BMI expects copper prices to reach $17,000 per ton by 2033, as strong demand prospects and structural deficits persist. In addition, oil prices have stabilized after being less affected by Hurricane Belial
According to the latest information from Zhitong Finance and Economics APP, due to the market sentiment betting on the Federal Reserve's interest rate cut in the third quarter continuing to lead the trend of copper prices, BMI, a research institution under Fitch Ratings, has raised its 2024 copper price forecast from $9,200 per ton to $9,600 per ton.
After soaring to a record high of $11,100 per ton in May, copper prices have fallen back, bringing a reality check to bullish investors in a weak market environment. Even with preliminary signs of demand recovery, copper prices continue to decline.
In a report on July 9th, BMI stated: "As we expected, the weakness of the US dollar will continue to push up copper prices in the second half of 2024, but the demand in the Chinese market will be the main drag on price increases."
Furthermore, BMI stated that copper demand in mainland China is expected to increase by 3.5% year-on-year in 2024, lower than the 5.0% in 2023.
Looking ahead, BMI forecasts that prices will reach $17,000 per ton by 2033 as the green transition accelerates, with strong demand prospects and structural deficits persisting.
In other commodity markets, there are signs that the Texas energy industry has been relatively less affected by Hurricane Belial, stabilizing oil prices after a decline in the previous trading day. Oil and gas companies have restarted some operations on Tuesday.
Brent crude futures rose by 0.18% to $84.81 per barrel, after falling 1.3% in the previous trading day. US WTI crude oil rose by 0.22% to $81.59 per barrel, after a 1.1% decline on Tuesday.
Suvro Sarkar, Head of the Energy Sector Team at DBS Bank, stated in an interview, "The arrival of Hurricane Belial seems to be the biggest driving factor at the moment, providing traders with an opportunity to lock in some profits after the recent two-week rally."