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Copper 2017 Outlook: What Factors Should Investors Watch?


Jan. 10 2017, Updated 10:41 p.m. ET

Copper 2017 outlook

Copper has been on a losing streak since 2011. Notably, copper has been on a downtrend after hitting $10,000 per metric ton at the beginning of 2011. LME (London Metals Exchange) copper prices have fallen in every year since 2011. Only in 2012 did they manage to hold steady, closing roughly flat compared to the previous year.

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Copper prices

After being in a downtrend for five years, copper finally broke the $5,000 per metric ton level—decisively this time—and briefly topped $6,000 per metric ton. President-elect Donald Trump’s proposed infrastructure investments have so far boosted commodity prices (DBC) (BHP).

Meanwhile, markets seem to have repriced copper for an expected rise in US copper demand. Although copper has lost some of its post-election gains, it still managed to end 2016 with decent yearly gains. Copper producers such as Freeport-McMoRan (FCX), Southern Copper (SCCO), and Teck Resources (TCK) have followed commodity prices higher.

After a stellar 2016 performance, investors are wondering whether it’s the beginning of good days for copper or whether the metal would return to the downside in 2017.

Key drivers

The chart above shows some of the key factors that could impact copper’s 2017 outlook. The key factor supporting copper prices seems to be an earlier-than-expected supply deficit. While analysts were previously projecting copper markets to move toward a supply deficit by the end of the decade, some market participants expect copper to be in a deficit as early as this year.

In the next article, we’ll analyze how the above-mentioned factors could impact copper’s 2017 outlook.


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