**Breaking News: Copper Prices Soar to Two-Year Highs**
Copper prices have smashed through the US$10,000 per metric ton barrier this week, reaching levels not witnessed in two years. The last time prices surged past this mark was in March 2022 amidst the turmoil following Russia’s invasion of Ukraine.
Despite lingering concerns over demand from China, fears surrounding a global supply shortage are intensifying.
Moreover, copper is riding a wave of optimism fueled by expectations of interest rate cuts from the US Federal Reserve.
Goldman Sachs (NYSE:GS) has issued a stark warning, predicting mounting supply stress. The investment bank’s analysts suggest the possibility of a “stockout episode” by the fourth quarter due to widening deficits. Notably, Goldman Sachs has raised its year-end copper price forecast to US$12,000 from US$10,000, underscoring its bullish outlook.
“We continue to forecast a shift into open-ended and mounting metal deficits from 2024 onwards,” noted analysts at the firm, as reported by Bloomberg.
The potential takeover of Anglo American (LSE:AAL,OTC Pink:AGPPF) by BHP (ASX:BHP,NYSE:BHP,LSE:BHP) has raised the specter of tighter control over global copper supply. If the merger materializes, the new entity would command a 10 percent share of global copper supply, surpassing key players like Chile’s Codelco and Freeport-McMoRan (NYSE:FCX).
The shutdown of Canadian miner First Quantum Minerals’ (TSX:FM,OTC Pink:FQVLF) Cobre Panama copper mine in the previous year has heightened concerns about potential supply shortages, further propelling copper prices upwards.
Despite the gains seen in copper prices, doubts persist, with some experts pointing to softer indicators in China, such as declining import premiums and cautious buying behavior among consumers.
As of Thursday (May 9), three-month London Metal Exchange copper was trading at US$9,904.50.
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Securities Disclosure: The author, Giann Liguid, does not hold any direct investment interest in the companies mentioned in this article.
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