COPPER is forecast to emerge from the economic fallout caused by the COVID-19 pandemic in relatively good form, according to Bloomberg News which cited the views of Kostas Bintas, head of copper trading at Trafigura.
The commodities trading firm estimates that the virus has reduced mine supply by 400,000 tons, while so far in 2020 scrap availability has dropped about 700,000 tons from levels seen a year earlier. Collectively, that outstrips a 900,000-ton year-on-year drop in demand over the same period, said Bloomberg News.
“Copper is coming out of this crisis differently,” Bintas said in an interview with the newswire. “When lockdowns were eased and people started to return to work, we were surprised to see our customers not only taking deliveries of volumes they’d already bought, but requesting more to cover themselves in case there were any further disruptions to supply,” he said.
The company bought and sold 4.35 million tons of copper last year, Bintas said, surpassing rival Glencore as the world’s top trader.
“Despite the noise of what the price is doing or the equity markets are doing, the most important thing is to isolate the signal that you’re getting from customers and suppliers,” Bintas said. “You can’t get more genuine feedback than that.”
In a sign of growing tightness, copper scrap supply has dried up so drastically that buyers in China were paying higher prices than for brand-new metal, Bintas told Bloomberg News. “Demand is clearly on a recovery path, while these big supply centres in South America are still under pressure,” he said.
