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09 September 2024

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Copper Weekly (09 September 2024): USD 8,930/ton (-2.7% WoW)

Recent Catalysts Driving the Price

  • Between 02–06 September 2024, copper prices fell -2.7% WoW, partly attributable to weak demand from China as the country struggled with economic recovery. China’s industrial output remain relatively flat MoM +5.1% YoY in Aug-24 (July: +5.3% YoY).
  • Additionally, concerns over rising interest rates in major economies like the US and Europe had heightened fears of industrial slowdown, which could curb global copper demand. The Fed rate hikes had pushed borrowing costs to over 5%, further dampening industrial growth. Increased inventory levels at key warehouses to 150k tons (+8% MoM) and stronger DXY (+0.3%) also contributed to the bearish sentiment.
  • Given recent developments, we may have to lower our average FY24 copper price forecast of USD 9,500 per ton (YTD: USD 9,110/ton). That said, we may also have to cut the IDR 3,300 (EV/EBITDA FY24: 12.2x) TP of MDKA, our top pick in the sector. Supported by its smelter in Weda Bay, Maluku, MDKA remains as our preferred copper play, particularly as it turns into profit in 2024.

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