More Market Watchers Questioning Copper Surplus

Mineweb reported that the idea that there will be a copper market surplus this year is being questioned by more and more market participants. While some anticipate a more balanced scenario, others are predicting a deficit.

As quoted in the market news:

Certainly, some leading research houses peg the sector as headed for surplus. Both Reuters’ GFMS and the International Copper Study Group (ICSG) see a surplus around 400,000 tonnes in the making for 2015. But increasingly analysts and miners are leaning toward a much tighter supply scenario than either the ICSG or GFMS. A key factor driving this alternate view of a tighter copper market – one close to balance – is that operational disruptions have already affected supply substantially in 2015. Slower expansions, labour issues, mining issues, are adding up, in other words.Analyst reports have lately focused on this tally. So too have copper outlooks from miners. Indeed, late last year Glencore went so far as to predict a rather huge, 1.6 million tonne, deficit in 2015. It largely questioned predictions of mine output.

More recently, Rio Tinto’s copper leader, Sebastien Jacques, joined the group of thinkers now leaning toward a much less plump surplus scenario. Rio Tinto’s Jacques once viewed the market as fairly well supplied at least until 2018. Thereafter, as many others, he has predicted deficits.

But he recently raised the issue of operational disruptions, along with decent demand, as changing his point of view. As quoted by the Sydney Morning Herald, he now sees a market in balance this year. Beyond, he drew a more bullish picture.

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