Japan's PPC sees copper price to ease to $8,600/T in 2022
21/12/2021 08:34
By Yuka Obayashi
TOKYO, Dec 21 (Reuters) - Japan's biggest copper supplier
Pan Pacific Copper (PPC) expects the metal's average price to
drop to $8,600 a tonne in 2022 from $9,300 this year as
additional supply from new mines will ease tightness seen in
recent years, an executive said on Tuesday.
"The copper price will likely weaken as the market will face
a bigger surplus than this year," Takaho Matsugasaki, PPC's
executive officer, told Reuters in an interview.
The London Metal Exchange (LME) copper price CMCU3 stood
at around $9,500 a tonne as of Tuesday.
"But the price will remain at high levels (compared with
last several years) helped by monetary policy easing,"
Matsugasaki said, predicting the prices to move even lower to
$7,500 in 2023 as the effects of monetary easing wear off.
PPC predicts the global refined copper market will see a
surplus of 109,000 tonnes in 2022, doubling from a surplus of
52,000 tonnes this year, as a spurt of new mine projects boost
global output.
Five major projects, including Quellaveco in Peru and
Quebrada Blanca QB2 in Chile, are expected to start production
by the end of next year. urn:newsml:reuters.com:*:nL1N2R91GT
"Supply pressures will likely prevail as producers want to
produce as much as possible to enjoy high copper prices,"
Matsugasaki said.
Still, tightness may be felt in some areas due to an
increase in back-logged inventories caused by delays and
disruptions in transport, he said.
PPC is 67.8% owned by JX Nippon Mining & Metals, a unit of
Eneos Holdings 5020.T , and 32.2% by Mitsui Mining and Smelting
5706.T , and outsources smelting and refining operations to its
parents.
PPC forecast Japan's output of refined copper will rise 7.4%
to 1.606 million tonnes in 2022, reversing this year's 5.6%
drop, while consumption will grow 5.7% to 930,000 tonnes next
year, following a 4.8% increase this year.
"There will be more construction projects next year, but
domestic demand won't recover to the pre-pandemic 2019 level,
which was boosted by Tokyo Olympics-related infrastructure
projects," he said.
(Reporting by Yuka Obayashi; Editing by Shounak Dasgupta)
((Yuka.Obayashi@thomsonreuters.com; +813-4520-1265))