"Linked to that, we forecast copper market deficits, and further inventory declines, this year and next," Widmer said.
"With (London Metal Exchange) inventories close to the pinch-point at which time spreads can move violently, there is a risk backwardation, driven by a rally in nearby prices, may increase."
Backwardation is when an underlying asset is trading at a higher price than the futures market for that asset.
Widmer also highlighted that a rise in volatility resulting from falling inventories was not without precedent, since nickel shortages in LME warehouses in 2006/7 drove nickel prices more than 300% higher.
Freeport-McMoRan CEO on outlook for copper amid its record run
Squawk on the Street
Given the fundamental environment and the depleted inventories, Widmer suggested that copper may spike to $13,000/t in the coming years after notching $10,000 last week for the first time in a decade.
Copper prices stood at just under $4.54 per pound as of 5:30 a.m. London time on Thursday, up 30% for the session.
After deficits in 2021 and 2022, BofA expects the copper market to rebalance in 2023 and 2024 before fresh shortfalls and a further draw down on inventories kick in from 2025.
"In our view, scrap supply is critical and our analysis suggests that scrap usage at smelters/refiners could increase from around 4,200t in 2016 to 6,700t by 2025," Widmer said.
"If our expectation of increased supply in secondary material, a non-transparent market, did not materialize, inventories could deplete within the next three years, giving rise to even more violent price swings that could take the red metal above $20,000/t ($9.07/lb)."
'The new oil'
Along with the broader economic recovery, demand for copper is also being boosted by its vital role in a number of rapidly growing industrial sectors, such as electric vehicle batteries and semiconductor wiring.
David Neuhauser, founder and managing director of U.S. hedge fund Livermore Partners, told CNBC on Wednesday that metals were receiving a general tailwind from a weaker dollar and increasing moves toward green infrastructure.
There's 'no doubt' some segments of copper consumption are a one-off: Analyst
Street Signs Europe
Commodity prices rose 3% in April, taking the global index up 80% since April 2020, and HSBC commodity analysts highlighted in a note Wednesday that demand for copper is being supported by investment in electrification as emission reduction strategies are further bolstered by policymakers.
Copper remains Livermore's favorite commodity at present, Neuhauser said.
"I think copper is the new oil and I think copper, for the next five to 10 years, is going to look tremendous with the potential for $20,000 per metric ton," Neuhauser said.
"We think there are some very solid small cap companies that have massive production potential, and valuations are attractive, and Livermore could make great return on investment.", you probably noticed that 2021 was a banner year for copper prices. So far, 2022 is following suit. And if your business buys scrap copper, you’ve definitely noticed that copper has been more expensive than ever before.
Globally, copper prices reached all-time highs in 2021 and reached a record high in early March of 2022 – with prices briefly exceeding $5.00 per pound. In May 2021, for example, the price for one metric ton of copper reached $10,512—a 130 percent price increase over March 2020. But the upward price trend isn’t expected to continue indefinitely; the World Bank estimated that the price would decrease to about $7,500 per ton by the end of 2022.
How much you can get for your scrap metal depends on where you live and changes day to day, but here’s one indication of how much the copper market has changed: In late 2020, we told you that scrap copper could bring in more than $2/pound. Over the last year, consumers have seen prices above $3 or even $4 per pound for copper scrap.
Why’s the Price Up for Scrap Copper?
So if copper has always been important and valuable, why has the price of copper skyrocketed in recent years? It’s a complex global market, but there are a few key reasons for the surge.
Here’s the bottom line for American businesses that generate scrap metal: You don’t want to be sitting on your copper scrap right now. Take advantage of a robust market for scrap copper and convert that coveted metal into cash while prices are high.
Miller Recycling Marks 31 Years as an ISRI Member
Miller Recycling has spent decades tracking scrap metal trends and helping our customers understand their options around scrap metal recycling. Around this time last year, I told you about an exciting milestone for Miller Recycling. We had begun our 30th year as a member of the Institute of Scrap Recycling Industries. A year later, I’m proud to begin Miller Recycling’s 31st year of ISRI membership. Our continuing membership in the scrap metal industry’s top trade association gives us access to resources and networking connections that help us stay at the cutting edge of the scrap recycling industry.
From scrap copper to obsolete electronics and even organic waste, Miller Recycling can help your business manage all its recyclable waste. We can make scrap recycling easy and pay competitive pricing for scrap metal of all kinds.
How much is 100 pounds of copper wire worth?
For 12-gauge wire average price is a $1.30 per lb. the way it is with insulation, that would translate in to $130.00 for your 100lbs of 12-gauge wire, without stripping it.
What is the price of copper today?
Copper Price Today.
How much is 10lbs of copper worth?
Current copper spot price is ~$2.41/lb. These 10 1lb bars are worth ~$24.10, but the price is more than $100.
What is the highest paying scrap metal?
Copper is King For most scrappers, copper is the king of scrap metal because it gains as much as $2 to $4 per pound. When it comes to scrap metal, that's a pretty high amount, especially compared to other metals like aluminum or brass.