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Informist, Wednesday, Jan. 8, 2025

 

MUMBAI – Copper prices are likely to remain under pressure this year because of concerns about demand from top consumer China, but aluminium prices could rise further as the market is expected to remain in a deficit, ICICI Direct said in its outlook for 2025.

 

The Chinese economy is already witnessing weak domestic consumption amid a prolonged property crisis and a potential trade war with the US could put pressure on prices of the red metal, the brokerage said. Moreover, the refined copper market is expected to remain at a surplus of 194,000 tonnes this year due to the ramp-up of new smelters and refineries in India and Indonesia. 

 

Global copper mine output is projected to increase by 3.5% in 2025, mainly due to a build-up in capacity at mines in the Democratic Republic of Congo and Mongolia, the report said, citing the International Copper Study Group. The uncertainty over restarting mining at the Cobre mine in Panama might weigh on the supply outlook. The closure of the mine took out 330,000 tonnes from global mine output in 2024, it said.

 

Additionally, copper inventories at major metal exchanges such as the London Metal Exchange remain elevated, signalling a well-supplied market. ICICI Direct expects copper prices to correct towards INR 690 per kg on MCX as long as it stays below the strong resistance of INR 860 per kg. At 1522 IST, the January copper contract on the MCX was up 0.5% at INR 820.65 per kg.

 

The broking firm expects aluminium prices to rise as the market is expected to be at a deficit of more than 450,000 tonnes this year, the report said. Russia's Rusal, among the world's major aluminium producers, plans to reduce output by more than 6% or 250,000 tonnes annually due to the soaring cost of alumina.

 

Aluminium inventories at LME-accredited warehouses have been diminishing persistently, which will support prices. Moreover, rising demand from electric vehicles, renewable power and electric grid infrastructure would also support prices of the metal, the report said.

 

ICICI Direct expects aluminium prices to rise towards INR 280 per kg on MCX as long as it stays above the INR 210 per kg level. At 1525 IST, the January aluminium contract on the MCX was steady at INR 240.20 per kg.  End

 

US$1 = INR 85.84

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Ashutosh Pati

Edited by Saji George Titus

 

 

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