Copper price will rise by 33% by the end of 2020

Concerns about supply and market expectations of growing demand from China pushed copper back to the market.

Copper prices were already on the rise because of stoppages at the world's two largest mines of the red metal, hitting 21-month high of $6,204 a ton reached on February 13.

Along with the recovery of demand from China, Citi Research predicts deliveries to move into deficit in 2017 for the first time in six years. The combination of stronger demand from China, a clear lack of visible copper inventory build, an end to cost deflation, and the U.S.-centric reflation story after the Trump election victory sparked positive price momentum through the latter stages of 2016.

After the historical highs in February 2011 when reached over $10,000 per metric ton, copper prices went down in a continuous slide, reaching a 7-year low around $4330 in January 2015, which was due to the slowdown in the growth of demand from China.

The shortage of supply will drive prices up rapidly over $6,000 in the second half of 2017, with peaks of up to $7,000 before the end of the year and more than $8,000 by the end of 2020, provides Citi.
In 2016, copper consumption in China has grown by about 5.7% as Citi's forecast was for growth between 3-7%. This year, Citi said it expects Chinese copper demand to moderate to between 3 to 4 percent, driven by power grid improvement plans and vehicle sales.

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