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LME copper was been trading in range-bound for most of March, easing 2% so far this month, as rising exchange inventories and falling premiums in China pressured a price rally that pushed prices to near a record high in February.
China’s imports of copper scrap surged over the first two months of 2021, jumping by 60% year-on-year to 191,720 tonnes.
“A new scrap surge is imminent, given London Metal Exchange copper has more than doubled in price since last March’s covid-19 low point of $4,371 per tonne,” Reuters columnist Andy Home wrote.
For analysts such as Morgan Stanley this is a reason for caution about copper’s prospects over the course of 2021. The bank has a fourth-quarter forecast of $8,488 per tonne, below the current LME price of $8,780.
Citi, which is calling for a “copper supercycle”, is not convinced scrap availability can expand enough to fill its forecast 500,000-tonne supply deficit this year.
(With files from Reuters)