Bank of America (BofA) analysts have projected that copper prices will exceed $10,000/t by 2025 and expect iron ore prices to drop below $80/t in the same year, according to reports.
The analysts have a highly favourable outlook for copper, anticipating high prices. This positive projection is particularly significant in light of potential interest rate cuts by the Federal Reserve, which could further boost copper prices.
Copper is in a robust position due to strong demand, limited supply and increased investment in energy transition projects.
On the other hand, iron ore is encountering difficulties stemming from declining demand, particularly from China’s property sector, which has historically been a significant consumer.
Despite global macroeconomic challenges, copper prices have displayed remarkable resilience in 2024, with a 6% year-to-date increase.
BofA analysts attribute this strength to several factors including tight mine supply and refining challenges.
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By GlobalData
Treatment and refining charges have significantly decreased, underscoring smelters’ challenges in processing copper under current market conditions.
Furthermore, substantial investment in energy infrastructure, particularly grid expansion projects related to decarbonisation, has significantly bolstered copper demand.
According to reports, the analysts said: “Manufacturing activity should stabilise as the Fed cuts rates, so we maintain our constructive copper view into 2025.”
Copper prices are expected to keep increasing, with predictions indicating a rise to $10,750/t by 2025.
Additionally, media reports show that BofA is still optimistic about gold and predicts its value will hit $3,000/oz by 2025.
The long-awaited $2,500 threshold for gold prices was reached on 20 August 2024, with the precious metal hitting $2,529.80/oz. A new record was reached earlier this week with the gold price surpassing $2,584/oz on Monday (16 September), according to figures from the World Gold Council.
The projection from BofA coincides with a 21% increase in the price of gold so far this year.
The analysts mentioned that they are optimistic about the metal due to interest rate reductions in the US and robust global demand for gold to preserve value.
A significant portion of the increase in the price of gold this year has been influenced by ongoing acquisitions by central banks globally, especially in China.
