Muzhu Mining Ltd. (CSE: MUZU)
Creating lasting wealth by developing gold and silver properties with near-term mining potential
As we all know, global copper resources are mainly concentrated in a few countries such as Chile, Peru and Congo. And due to the lack of long-term capital expenditure, new supply is limited, geopolitical conflicts and other factors lead to greater uncertainty in the output of copper mines. Market participants estimate that in 2024 the global supply and demand of copper will once again be in shortage, and in 2025 the supply and demand gap may reach 662,000 tonnes.
Coupled with the expected Fed rate cut in 2024, which will be favourable to the dollar-denominated commodity prices, Citi and Goldman Sachs both expect copper prices on the London Metal Exchange (LME) to rise to $15,000 per tonne in 2025.
In an interview with Bloomberg this week, Robert Friedland, founder and co-chairman of Ivanhoe Mines (TSX: IVN), said the physical market for copper is very tight and in short supply, and that the price of the metal could soar as the Federal Reserve cuts interest rates this year.
Friedland believes that by the middle of this year, the price of the metal in dollar terms should soar. Copper prices are expected to be bottoming out at this stage, with Ivanhoe preferring to look as high as $9,500 a tonne before falling to $7,500 a tonne.
Prior to this, Goldman Sachs analysts have issued a bullish report on copper prices, arguing that “the closure of Panama’s copper mines, coupled with declining grades at Chilean copper mines, will leave the copper market in a state of chronic shortage”. Goldman Sachs expects copper prices to touch $10,000 per tonne during the year 2024 and rise sharply in 2025. The analyst wrote in the report, “Our confidence that copper prices will recover significantly to an average of $15,000 per tonne in 2025 is now substantially higher.”
Friedland noted that the world’s major economies, including China, India, and the European Union, will show growth in copper consumption, with rising demand for copper from the arms race, ESG (environmental, social, and governance), and the green transformation of the world economy. Overall, the copper market is a potential “powder keg” that could explode in the second half of the year.
