Copper tops $14,000 mark as speculation, mine disruptions fuel metals surge | Invezz false### Choose your country### Choose preferred languagePopular languagesEnglish (USA) [Deutsch] [Español] [Français] [Português]All available languagesEnglish (USA) [English (UK)] [English (Australia)] [English (Canada)] [English (New Zealand)] [English (South Africa)] [English (Ireland)] [English (Singapore)] [English (Nigeria)] [English (Pakistan)] [English (India)] [eština] [Deutsch] [Dansk] [Español] [Français] [Itali ...

Core Viewpoint - Gold and silver experienced significant volatility at the end of the year, with both metals reaching all-time highs before facing a sharp selloff driven by margin requirements and market speculation [1][3][17]. Price Movements - Gold prices fell over 4% on Monday to approximately $4,355 per ounce after peaking near $4,565 late last week, but rebounded to the $4,385 to $4,400 range on Tuesday [1][7][8]. - Silver saw even more drastic fluctuations, dropping nearly 9% on Monday to just above $73 per ounce after trading above $84 over the weekend, then surging up to 10% intraday on Tuesday [2][10][11]. Market Dynamics - The initial selloff was triggered by CME Group's decision to raise margin requirements on precious metals futures, leading to forced selling during a period of low liquidity [3][4]. - The volatility in the market is exacerbated by the thin trading environment typical of late December, where prices can swing dramatically on minimal conviction [7][16]. Speculative Behavior - The rapid price movements indicate a speculative environment, particularly for silver, which has outpaced gold significantly this year, with gains more than double those of gold at one point [11][16]. - Market participants noted that the rebound in prices suggests underlying demand remains strong, particularly from investors looking for entry points after the selloff [18]. Annual Performance - Despite recent volatility, both gold and silver are on track for their best annual gains since 1979, with silver up approximately 150% to 160% and gold up about 65% to 70% for the year [17].

Group 1 - Copper has recorded its longest winning streak since 2017, rising 2.7% to settle at $12,558.50 a ton, marking the eighth consecutive day of gains driven by supply chain stress [1] - Copper futures have surged by over 40% this year, representing the largest annual increase since 2009, with a weaker US dollar contributing to the price rise [2] - Supply issues have significantly impacted the copper market, with mines in Indonesia, Chile, and the Democratic Republic of the Congo facing accidents, while aluminum production is threatened by higher energy costs and supply limits in China [3] Group 2 - The potential for US import tariffs on copper is a major driver of market sentiment, with warnings of an extreme shortage of copper globally by 2026 [3] - Investor sentiment regarding US copper tariffs is expected to influence copper prices in the coming months, focusing on regional stock levels and material entering the US rather than global fundamentals [4] - Despite rising inventories in the US exchange, the premium for March copper futures on Comex has decreased, indicating a complex market situation influenced by macroeconomic outlook and supply risks [5] Group 3 - Other metals on the exchange, particularly nickel, have also seen price increases, driven by supply cut plans from top producer Indonesia [6]

Core Viewpoint - Copper prices have surged to record levels in both Shanghai and New York, driven by expectations of tighter global supplies in 2026 and the impact of a weaker US dollar [1][6]. Price Movements - In China, copper prices increased by as much as 4.7%, reaching approximately 100,000 yuan ($14,270) per ton on the Shanghai Futures Exchange for the first time [2]. - In New York, Comex futures rose by up to 5.6%, hitting $5.8075 per pound, marking the highest intraday level since a significant short squeeze in July [2]. Market Trends - The recent rise in copper prices coincided with a broader rally in precious metals, including gold, silver, and platinum, which also reached record highs [3]. - December has seen substantial gains in metals, influenced by trade dislocations, geopolitical uncertainties, and supply shocks, with copper expected to benefit significantly from the global energy transition [4]. Future Outlook - Copper is projected to be one of the biggest winners in 2025, with an anticipated gain of approximately 42% in New York [4]. - The potential review of US tariffs on copper in 2026 could impact market dynamics, as earlier spikes in prices were linked to tariff anticipation [5]. Currency Impact - Recent price increases have been supported by a decline in the US dollar, which is on track for its largest weekly loss since June, making raw materials cheaper for most buyers [6].

Summary of Conference Call on China Materials Industry Outlook Industry Overview - The conference call focused on the China materials industry, particularly in the context of an up-cycle expected to continue into 2026, driven by a supportive macro environment and supply disruptions affecting commodity prices [1][2]. Key Insights - **Commodity Price Support**: The macroeconomic environment is expected to weaken the DXY by another 5% into the first half of 2026, with three anticipated rate cuts from the Fed [2]. This is expected to support commodity prices, particularly for aluminum, copper, gold, lithium, and cobalt equities [1][2]. - **Energy Storage Demand**: Demand from Energy Storage Systems (ESS) is projected to grow approximately 50% in 2026, significantly impacting the consumption of copper, aluminum, and lithium [3]. ESS production is expected to increase from 350 GWh in 2024 to around 900 GWh in 2026, leading to potential deficits in aluminum and copper [3]. - **Supply Challenges**: The industry is facing significant supply challenges, particularly in copper and aluminum. Major mine accidents in 2025 have constrained supply growth, and Chinese copper smelters may reduce output by 10% in 2026 [4]. Additionally, aluminum production is threatened by potential shutdowns and power outages, leading to a projected deficit in 2026 [4]. - **Investment Opportunities**: Preferred investment opportunities highlighted include companies such as Zijin Mining, CMOC, Hongqiao, Chalco, JL Mag, Huayou Cobalt, and Huaxin Cement, which are expected to benefit from the favorable market conditions [2][4]. Additional Important Points - **Anti-involution Progress**: The industry is gradually addressing overproduction issues, particularly in coal and cement, with more stringent controls expected to take effect in 2026 [5]. - **Price Forecasts**: The conference provided updated price forecasts for various commodities, indicating a slight increase in aluminum and copper prices for 2026, with aluminum projected at $1.40 per lb and copper at $5.34 per lb [16]. - **Stock Recommendations**: A list of overweight stocks in the Greater China materials sector was provided, including JL Mag, Zhaojin, Huaxin, and Chalco, among others, with target price increases ranging from 10% to 51% [9][10]. - **Market Cap and Liquidity**: The report included details on market capitalization and average daily volume for recommended stocks, indicating strong liquidity for several key players in the sector [9][10]. This summary encapsulates the critical insights and recommendations from the conference call regarding the China materials industry, highlighting both opportunities and challenges ahead.