Base Metals: Copper prices to average $7,600 per ton in 2022

LAGOS (Capital Markets in Africa) – LME copper cash prices averaged $9,293.7 per ton in the year- to-August 24, 2022 period, constituting an increase of 1.4% from an average of $9,164 a ton in the same period of 2021. Supply disruptions and expectations of robust global demand drove the rise in prices. Also, copper prices declined to $8,076 per ton on August 24, 2022 from an all-time high of $11,299.5 a ton on October 18, 2021. The decline in prices was due to the tightening of global monetary policy, a stronger US dollar and the renewed lockdown measures in China amid a surge in the number of new coronavirus cases, which have limited the prospects of a recovery in copper demand. In parallel, the latest available figures from the International Copper Study Group show that global demand for refined copper was 12.8 million tons in the first half of 2022, up by 2.7% from the same period of 2021, due to an increase of 3.6% in Chinese demand, given that China is the world’s largest consumer of the metal, and a growth of 1.6% in global demand for refined copper excluding China. Also, Chinese imports of refined copper reached their highest level in June 2022 since December 2021. In parallel, global refined copper production reached 12.7 million tons in the first half of 2022, constituting an increase of 3.2% from 12.3 million tons in the same period last year, as higher output from China and the Democratic Republic of the Congo was partially offset by lower production in Chile and Japan. Further, S&P Global Ratings projected copper prices to average $7,600 per ton in 2022 and $8,700 a ton in 2023. 

Precious Metals: Platinum prices to average $925 per ounce in 2022
Platinum prices averaged $970.2 per troy ounce in the year-to- August 24, 2022 period, constituting a decrease of 15.1% from an average of $1,143.2 an ounce in the same period last year, due mainly to chip shortages in the automotive sector that have re- strained the demand for the metal. Further, platinum prices regressed from a recent high of $1,151 per ounce on March 8, 2022 to $875 an ounce on August 24, 2022, driven by the expected slowdown in global economic growth, which put downward pressure on the metal’s price. In parallel, Citi Research projected global demand for platinum to reach 7.25 million ounces in 2022 and to increase by 3% from 7 million ounces in 2021. Also, it forecast the global supply of platinum to decrease by 7% from 8.1 million ounces in 2021 to 7.6 million ounces in 2022, with mine output representing 76.7% of global refined platinum pro- duction in 2022. In addition, it expected platinum prices to de- crease in the near term in case of a major global recession. But it projected the metal’s prices to increase in 2023, driven by the rebound in auto-catalyst demand on improved chip supply and the recovery in global growth. As such, it forecast platinum prices to average $925 per ounce in 2022 and $1,025 an ounce in 2023.

Source: Citi Research, Refinitiv, S&P Global Ratings