1. Is the world’s largest copper mining giant still optimistic about global copper prices?
According to the Financial Associated Press, Máximo Pacheco, chairman of Chilean national copper company Codelco, said in an interview recently that despite the recent sharp drop in copper prices, copper prices are expected to remain very strong in the future. Codelco is the world's largest copper producer.
Copper prices recorded their biggest weekly drop in a year this week as the market worried that tightening policies by central banks would curb global economic growth and thereby reduce demand for industrial metals. With its wide range of industrial and construction uses, copper prices are often seen as a bellwether for economic activity.
Lun Copper closed at US$8,325 per ton on June 25, and once touched US$8,122.50 per ton during the session, down 25% from the peak in March, and also the lowest level since February 2021. In addition to copper, other industrial metal prices also fell sharply. Taking tin as an example, Lunxi fell nearly 15% on Friday, and the cumulative decline this week reached about 25%.
Pacheco said: "We may be in a temporary short-term turmoil, but what matters is the fundamentals, and the (current) supply and demand balance looks very favorable for those of us with copper reserves." Chile is the world's largest copper producer.
Pacheco added that in a world where copper is the best conductor and there are not many new reserves, the price of copper looks very strong because the future is very conducive to electrification.
2. Will copper prices rise or fall?
We see that the world's largest copper mining giant is still there and is optimistic about the entire copper price market. Many people will be surprised. Why are the copper mining giants so optimistic about the current copper price? Could it be that he is trying to make a fool of himself?
First of all, from the perspective of the entire market development, it is true that the current copper price in the entire world has dropped to a relatively low level. At this time, it is the result of the combined effect of market supply and demand for copper. On the one hand, from the perspective of supply, The market supply is relatively stable, and there has been no large-scale increase or large-scale decline in market supply. On the other hand, from the perspective of market demand, affected by the relative fluctuations of the entire world market, especially the impact of inflation , the entire international copper usage is actually showing a downward trend in demand, and the final result is As a result, the entire international copper price has begun to enter a downward trend, which is also the reason for the current relatively large-scale decline in the entire market.
Secondly, the core reason why the world's largest copper mining giant is still optimistic about the long-term value of copper is that copper, as an important industrial metal, has gradually separated from the currency market, but in most industries In the use market, copper, as a very important industrial raw material, is in extremely high demand in the market. Especially with the development of the Internet industry, electronic communications and other industries, the use of copper is still increasing, so Against this background, there is still room for growth in copper market demand, so this is why the world's largest copper mining company is still optimistic about the current copper market.
Third, after we understand the overall market fluctuation trend and the different views of both parties, we can actually conclude that from a short-term perspective, the copper market is in a state of relative oversupply and insufficient demand. Therefore, it has entered a downward cycle, but if we put this logic from the perspective of long-term development, the world's demand for copper is still very large. As long as it can be stabilized at this time, the advantage of its own market is the long-term market, and there will still be Better development prospects, this is actually the core key that this Chilean copper mining company wants to express. However, for our Chinese companies, we can actually further strengthen market reserves based on the current low-price market conditions. Through this reserve approach, we can smooth out market fluctuations and reduce the impact of large-scale changes in copper prices on our daily production.
