Copper: Shifting from underperformer to possible leader – Commerzbank

Copper's Recent Surge and Future Outlook

Thu Lan Nguyen from Commerzbank highlights copper's impressive rebound, noting its shift from one of the weakest metals to a standout performer. This turnaround follows a period of pressure caused by increased LME inventories and uncertain supply developments. While upcoming stock releases and the potential reopening of a Panama mine may limit price gains in the short run, a significant drop in Chilean production points to ongoing supply concerns that could drive copper prices higher as economic anxieties diminish.

Short-Term Challenges and Long-Term Supply Issues

Today, copper stands out among metals, largely because it had recently lagged behind its peers. Its cyclical nature contributes to these fluctuations, but fundamental factors have also played a role. Since mid-January, LME copper stocks have climbed sharply, reaching levels not seen since 2018, which has weighed on prices.

Supply conditions remain uncertain. News from Panama indicates the government will soon permit the sale of copper stockpiles from a mine that was shut down in 2023, adding further downward pressure on prices.

Additionally, authorities are expected to decide by June whether mining operations in Panama can resume, which could influence supply dynamics.

Meanwhile, Chile—the world's largest copper producer—is facing production challenges. February saw the country's output drop to its lowest monthly figure in a decade.

These developments suggest that once current economic worries fade, supply shortages may become the dominant concern, potentially supporting higher copper prices over the longer term.