Copper Faces at Least Two More Years of Pain, Rio Estimates

The copper market is facing two or three years more of pain, though the good news for the metal, which hit a six-year low this week, is that it will recover faster than other commodities, according to Rio Tinto Group.

Copper has tumbled 26 percent this year as China’s faltering expansion curbs demand and with the dollar trading near its highest level since at least 2005, making commodities more expensive for buyers in other currencies.

Rio, the world’s-second biggest miner, is becoming confident the market could move back into deficit by the end of 2017 or in 2018, Jean-Sebastien Jacques, chief executive officer for copper and coal, said Thursday in an interview in Sydney at the Bloomberg Address.

“The one commodity we expect to recover faster than others is likely to be copper,” Jacques said. “In the next two or three years we can see the light at the end of the tunnel as far as copper is concerned.”

China’s slowest pace of economic growth in a quarter of a century is weighing on metals to energy prices and eroding profits for producers. The Bloomberg Commodity Index of returns on 22 raw material this month touched a 16-year low and is heading for the fifth straight annual loss, the longest slide on records dating to 1991.


Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.