2022 CHART THREAD, page-30

I had noticed the low physical stocks but was not aware of the 30-year timeframe.

For some time, I have been puzzled by the low physical stocks but low Cu price and 2023 forecasts for a surplus and a falling price. There seems to be a disconnect between a low Cu price and the reality of low physical stocks, which keep getting lower, Chilian estimated production falling to a 16-year low and a mine closing in Panama supplying 1.5% of world Cu supply (see quote below from Lowell Resources December 22 report).

These facts do not align for a Cu surplus (ie higher production than demand) in 2023 and a falling price unless a lot more Cu mines in the rest of the world increase production or new mines start production. In addition, with China very recently opening up the expectation is for more Cu demand from that country in 2023.

Goldman Sachs published a view recently (December I think) which went against the crowd view, stating they expected a Cu deficit in 2023 (vs their previous surplus view).

The most recent evidence suggests the price of Cu may rise in 2023, possibly significantly. The lower US $ has probably had a positive impact of Cu prices since early November.

"Panama said it would close First Quantum’s Cobre Panama copper mine, after tax negotiations
broke down. The mine produces nearly 1.5% of global copper supply at full capacity."
• Cochilco estimated Chilean copper output will fall to a 16-year low. For the 2022 calendar year,
copper traded up to US$4.90/lb (in March, coincident with the gold price 2022 high) and as low as
US$3.20/lb in July, before finishing December at US$3.80/lb (down around 15% on the year)."

02619466.pdf (weblink.com.au)