$3.50/lb copper is possible before 2024 ends, warns Scott Pollan

Increased supply and poor economic conditions over the short term could hurt copper, said Scott Pollan, president of Emergency Material Services. 

On Thursday Pollan spoke to Kitco Mining. 

Pollan predicts a near-term decline, potentially reaching below $3.50 by the end of the year, and a possible revisit of 2022 lows in early 2025. He attributed the decline to weakening demand and increasing supply. However, Pollen remains bullish on copper long-term, citing the millennial consumption cycle and the ongoing electrification trend as key drivers for future demand. He also highlights the challenges in building new copper mines, which could further constrain supply and push prices higher.

Despite challenging headwinds for the metal over the short term, that hasn’t diminished M&A. In 2024, there were some monster copper deals. This summer BHP Group and Lundin Mining bought Filo in a $3 billion copper deal. Earlier this year BHP Group tried to acquire Anglo American for its South American copper assets. The offer size reached $49 billion. 

Pollan said there is a rush for tier-one copper assets as the big miners try to show investors they have a long-lasting, reliable supply. 

"[It's a] rush to buy tier one assets by major producers," said Pollan "They need to assure their investors that they have secured a supply of raw material for the long-term future. In my opinion, we'll see more [M&A] for smaller producing facilities as tier one producers really try to build up their book of supply."

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.