Macquarie analysts hike copper forecasts on rising demand
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The news: Macquarie analysts have lifted their short-term copper price forecasts, with expectations that ASX majors South32 and Sandfire Resources will benefit most from rising global demand in the metal.
The numbers: The analysts upgraded their copper forecasts by 7% to USD4.39 ($6.65) a pound in the 2024 calendar year, and up 9% to USD4.34 a pound in 2025.
Copper prices were last at USD4.80.
The context: Macquarie said that while committed mine supply forecasts are little changed for the current calendar year, they have been revised lower for CY25 through to CY28, primarily due to a more conservative assumption on the potential restart of the Cobre Panamá mine. The mine is majority owned by Canadian miner First Quantum Minerals.
Meanwhile, an increase in global demand will be partially offset by slower Chinese demand growth due to a weaker property outlook, they said.
Given the magnitude of copper price rises, the analysts have lowered both mine supply and refined demand estimates, but a new tightening of the balance leads to a higher price outlook in the short term.
Over the medium term, however, the market is expected to swing back to surplus, with analysts' CY26 prices revised 1% lower and CY27 prices unchanged as the market approaches a balance.
In the longer run, the analysts forecast more deficits, with their CY28 price lifting 15%.
The analysts said that South32 is its diversified preference, noting its growing base exposure, while BHP was now "marginally" preferred over Rio Tinto among the major metal miners.
Meanwhile, Sandfire Resources is the analysts' pure-play preference, citing strong financial metrics in FY25.
The source: Macquarie research
