There is an uneasy balance of supply and demand at the moment with the price of copper holding steady at it’s elevated £ 6.50 /kg price and bonded stocks increase slightly to 84k.
For speculators the question will be whether the current elevated price is sustainable and whether they should double down on their investment or offload to secure their profits.
For miners and processors this is the time to max supply and their are potential off market deals to be done to secure long term supply contracts at historically high prices, especially with the global drive towards Electric Vehicles driving demand.
Users will be trying to increase prices to cover the increase in the cost of copper, both long term pricing and short term contracts. They can argue that the current high price is here to stay, knowing that if there is a fall in the price of copper they may be able to hand onto those price increases, whereas the final customer will be shopping around as much as possible to minimise price increases.
I also expect a shift away from average last month copper price based contracts, FIRM, to average next month’s copper price, VARIABLE, to shift the risk of copper price increases onto the user / end customer.
Can miners and processors increase supply to match demand ? Investment projects will have a good rate of return but can easily have a 5 or more year lead time. Also there is an ever increasing environmental restrictions on new copper projects.