COPPER producers have warned the price of the metal will become volatile as the industry struggled to bring new supply online.
Price swings would be “sharp from time to time” said the Financial Times citing Iván Arriagada, CEO of Chilean copper producer Antofagasta. He
Arriagada’s comments come just as LME Week began where producers, traders and users meet to agree contracts for the following year.
“Volatility is going to be a persistent feature,” said Nicholas Snowdon, head of metals and mining research at Mercuria, a trading house, referring to copper prices. “It’s going to be a see-saw.”
Last week copper had its biggest weekly gain in four months, up six per cent as it broke through $10,000 per ton, after China announced stimulus measures expected to shore up demand in the world’s largest consumer of the metal, said the FT.
Prices had surged to a record high of more than $11,100 in May, driven by constrained supply and demand for renewable energy, before sinking over the summer as some analysts questioned miners’ repeated predictions of shortages, it said.
The FT quoted Teck Resources CEO Jonathan Price as saying that the latest additional stimulus measures from China should “spur some new demand”. However, even the rising copper prices may not be “sufficient to incentivise the building of some of the megaprojects that the world is going to need”, he added.
