Will metals see a modest uptick?

BMI, a Fitch Solutions company with a U.S. office in New York, predicts metal prices in general will increase slightly this year, capped by weak Chinese demand and limited growth across the major markets.

The company sees global growth declining from 2.6 percent in 2023 to 2.1 percent in 2024 in response to policy tightening, with mainland China’s gross domestic product (GDP) growth expected to slow to 4.7 percent year over year compared with 5.2 percent in 2023.

Regarding copper specifically, despite possible early-year pressures, BMI says pricing will be supported by rising demand from the green energy transition and the expected decline in the strength of the U.S. dollar relative to other currencies as the U.S. Federal Reserve is expected to cut interest rates in the second half of the year.

Scott Greenberg, a Florida-based senior trader at C&Y Global Holdings, headquartered in Houston, also foresees the dollar declining in 2024, pushing up the copper price.

“India seems to be more aggressive with aluminum-bearing materials, where Malaysia seems to have an easier time handling combo loads.” – Scott Greenberg of C&Y Global Holdings

“There are also supply disruptions in the world, with the Cobre Panama mine’s closure,” Greenberg says. “All of this points to copper having a somewhat dramatic increase.”

John Gross of John E. Gross Consulting and “The Copper Report” agrees that lost mining production would suggest higher copper prices. “We don’t have higher prices,” he says, because of the slower global economy, which also is affecting China, the world’s largest copper consumer and producer. (For more on copper markets, click here.)

Greenberg describes red metal scrap generation in the U.S. and Canada as having been stable if “lackluster” last year.

“When the global economy begins to improve, scrap flow will be sure to increase as well,” he says.

According to a metals trader based in the Southeast, copper scrap markets throughout 2023 were “touch and go,” with this year getting off to a similar start. He says scrap consumers are being “tentative” as they continue to work through their excess inventories.

The trader says January brought more interest in aluminum scrap than there was at the end of last year, but it still does not amount to “massive demand.”

In the fall 2023 contract season, he says aluminum scrap consumers seemed less interested in contracting business for this year “at prices that made sense.”

The trader reports that copper scrap demand from China remains strong, saying, “They are in the market buying, and not limiting volumes, at prices that are competitive or better than domestic markets.”

“India and Malaysia seem to be the countries with the most completive prices and demand,” Greenberg says of export demand for nonferrous scrap. “India seems to be more aggressive with aluminum-bearing materials, where Malaysia seems to have an easier time handling combo loads.”