Japan's Pan Pacific sees copper hovering around $7,000/T in 2021
16/12/2020 11:21
* PPC sees 121,000 T surplus in 2021 global refined copper
market
* Aims to set 2021 term premiums to China in line with 2020
level
By Yuka Obayashi
TOKYO, Dec 16 (Reuters) - Pan Pacific Copper (PPC), Japan's
top copper supplier, expects the price of the industrial metal
to hover between $6,500 and $7,000 a tonne in 2021, against
about $7,850 now, as demand recovery is limited and the market
will register a surplus, its executive said.
PPC, jointly owned by JX Nippon Mining & Metals and Mitsui
Mining and Smelting 5706.T , projects the global consumption
and supply of refined copper to increase by 3.3% and 2.6%
respectively in 2021 from this year, Naoki Kojima, PPC's general
manager for marketing, told Reuters on Wednesday.
PPC sees the global refined copper market facing a surplus
of 121,000 tonnes next year, against a surplus of 291,000 tonnes
this year.
"Demand in 2021 will exceed this year's level as governments
across the globe are taking stimulus measures to boost economy,"
Kojima said.
"But it won't be back to the 2019 level as the COVID-19
pandemic will continue to weigh on demand in the first half," he
said.
Copper prices CMCU3 have extended their sharp recovery
last week from the March lockdown lows of $4,371 to $7,973.5 a
tonne, the highest since February 2013, buoyed by China's solid
demand and hefty investments by speculators amid monetary policy
easing. urn:newsml:reuters.com:*:nL1N2IV1A6 urn:newsml:reuters.com:*:nL8N2IA35Y
PPC views the current prices do not reflect fundamentals and
the rally has been overdone.
"The reasonable trading range next year will be between
$6,500 and $7,000 a tonne," Kojima said.
In November, top copper producer Codelco agreed its 2021
term premiums with a major Chinese buyer at $88 a tonne, keeping
steady at this year's level. urn:newsml:reuters.com:*:nL1N2HS173
The premium is paid on top of London Metal Exchange copper
prices for physical delivery of copper cathodes into China, the
world's biggest copper consumer, and is a widely watched
industry benchmark.
Kojima said that PPC wants to set its own 2021 term premiums
to China also in line with this year's level, but declined to
give a specific price.
(Reporting by Yuka Obayashi, editing by Louise Heavens)
((Yuka.Obayashi@thomsonreuters.com; +813-4563-2761;))