EconomyCopper opens lower, but analysts foresee a better outlook...

Copper opens lower, but analysts foresee a better outlook for the red metal in 2022

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Lima, December 30, 2021Updated 12/30/2021 09:29 am

The price of copper opened lower on Thursday due to tensions between MMG Las Bambas and the communities of southern Peru; However, analysts say that its demand would expand in 2022.

Three-month copper on the London Metal Exchange was down 0.2% to $ 9,659 a tonne, but some analysts said the metal could continue to shore up in 2022.

“Copper demand is expected to enter its second year of expansion, especially after the recently concluded COP26 showed a growing willingness of governments to prioritize clean energy.”said Howie Lee, an economist at OCBC in Singapore.

Peru’s government is still far from reaching an agreement that will ensure the restart of MMG Ltd’s Las Bambas copper mine, a community adviser and a government source said on Wednesday.

For their part, aluminum prices rose on Thursday after two smelters cut production due to high energy prices, fueling concerns about a potential shortage.

Three-month aluminum on the London Metal Exchange was up 0.5% at $ 2,823.50 a tonne as of 10:00 GMT, after two days of losses. Aluminum in Shanghai rose as much as 3.6% to 20,585 yuan a ton, its highest level since October 27.

Alcoa halted production at its San Ciprián operation in Spain for two years, while an aluminum plant in Slovakia in which Norsk Hydro has a majority stake will reduce production to about 60% of capacity.

“While they (Alcoa) may be the first, they probably won’t be the last European metals producer to take this action, when energy costs are expected to potentially double during 2022.”Malcolm Freeman of Kingdom Futures said in a note.

An increase in energy and natural gas costs across Europe this year has led to production cuts in foundries, chemical plants and other industries.

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