Copper market significantly more oversupplied than expected in spring – Commerzbank

The International Copper Study Group (ICSG) then followed with the publication of its forecasts for the copper market, Commerzbank’s commodity analyst Carsten Fritsch notes.

Demand is expected to increase even more next year

“The ICSG had to adjust its forecast significantly upwards due to an already significant oversupply in the first half of the year: it now expects a supply surplus of 470,000 tons; in spring it had still assumed a surplus of around 160,000 tons. This is largely due to significantly stronger production growth: instead of around 2%, (adjusted) global production is now expected to increase by 4.2%.”

“On the one hand, this year's losses are significantly lower than usual, and on the other hand, the Democratic Republic of Congo and China have further expanded their capacities. At 2.2%, the forecasted increase in demand is largely in line with expectations in spring. Next year, demand is expected to increase even more: the ICSG expects an increase of 2.7% compared to 2024. At the same time, production growth is expected to lose significant momentum and only reach 1.6%.”

“Even if capacities continue to grow, the shortage of concentrates would slow down the expansion of production. The ICSG consequently expects a smaller supply surplus of just under 200,000 tons in 2025. However, this would be twice as high as expected in spring and even slightly higher than previously expected for the current year. Even if these figures have not immediately been able to curb the euphoria on the copper market, they cannot be ignored in the long term.”