Copper has lost all the gains it made this year. But in the view of strategists at ING, the metal should rally once China recovers from covid.
China demand to recover once covid is under control
“Despite all the doom and gloom in the short-term picture, we are cautiously optimistic about copper in the medium term once China brings the virus under control and becomes more confident in easing lockdowns. However, the magnitude of demand pick-up will depend largely on the scale of the stimulus and, in particular, the policies relevant to those copper intensive sectors, such as the power infrastructure and the property market.”
“Our base case average prices remained unchanged for 2Q at $10,000/t from the previous update, but some potential upside episodes driven by a demand recovery may be delayed into late 2Q22 or 2H22 rather than sooner. And currently, our price forecasts remain unchanged for 3Q at$9,900/t and 4Q at $9,800/t (LME 3M quarterly average).”