We are holding to our view of higher copper prices by year-end. The market's mood has been sour since April because of worsening US-China trade relations and related softness in global manufacturing. Our market-balance calculations, however, show a market deficit in both 2019 and 2020. Inventory supports this fundamentally tight picture of the market — it reads low relative to consumption (even at the weak rates of growth now projected) and has been trending lower for the past two years. This view of the market points prices higher and suggests a potential upside surprise should sentiment change. An added risk that has emerged in just the past month is the unrest in Chile, which may threaten production and exports in the world’s largest producer.
Our LME price forecast has prices averaging $5,875/metric ton in the fourth quarter, rising toward $6,400/metric ton in the first half of 2020. We therefore regard prices below $6,000 as a good buying opportunity. Although prices have moved lower than expected, we would seize on current prices to lock in forward buys.
Watch John Anton, Associate Director, Pricing & Purchasing, talk about the realities of the copper market production, inventory, and price.

On the downside, we now place an absolute bottom near $4,900 per metric ton, a cost floor that a global recession would expose should consumption actually contract. To learn more, visit Commodity Coverage – Metals