Dr. Copper is sick. For the first time since May 2009, Copper futures prices traded with a $1 handle this morning ($1.99) as Nomura analysts warn the commodity is likely to see more downside risk over the medium term as the market is expected to remain in surplus through the end of the decade.
As Bloomberg adds, Nomura's Patrick Jones warns:
Copper demand could see 2m-3m mt/yr “demand destruction” led by substitution of the metal by using aluminum and other materials.
Expects substitution in autos, air conditioning, power distribution cabling rising over next several yrs
Despite RBC noting yesterday, copper price should now be reasonably well supported at $2.08/lb vs historic cost support at 90th percentile of cash cost curve (at $1.98/lb), though if market remains in surplus, further downside risk exists