A squeeze in global copper markets will tighten again next year, pushing up prices of concentrate and refined metal to new highs, the head of metals research at commodity trader Mercuria said on Wednesday.
Nicholas Snowdon, a high-profile copper bull at Geneva-based Mercuria, said the global market for copper concentrate, which is smelted into metal, will be in a deficit of roughly 500 000 tons next year, on par with 2025.
He attributed the estimate, improved from his May forecast of a deficit of 700,000 tons, to limited supply growth and growing demand from new smelters outside China.
"It's a market that has faced a significant supply shock this year and it's one ... set to continue to next year," Snowdon told the World Copper Conference Asia 2025 in China's commercial hub of Shanghai.
The rush to get copper into the United States ahead of tariffs has led to a stockpile there of about 3/4ths of global cathode inventory, potentially rising to 90% by the first quarter of next year, he said.
Refined copper prices on the London Metal Exchange will need to rise to pull metal back on to global markets, which are vulnerable to low inventory, Snowdon said.
Snowdon said the cathode market was now in a surplus of between 350 000 tons and 400 000 tons, a big revision from his May forecast of a 300 000-ton shortfall.
Mercuria is among a host of energy traders, such as BGN and Gunvor, expanding into metals trading, betting that structural changes in global energy systems will prove lucrative.
In the past 12 months, Mercuria has invested nearly $2 billion and traded about one-million tons of metal and 1.5-million tons of concentrate, Snowdon said.