Until a new supercycle develops, prices will remain beholden to business cycles and driven by their more transient highs and lows, Monday's note concluded.Ī consistent criticism JPMorgan analysts received, according to the note, was that while the Chinese credit cycle may well have peaked, low interest rates and government stimulus will continue to support credit growth outside of China. "Our long-held view is based on our assessment that the current China-driven supercycle has peaked and is unwinding as Chinese investment growth and exports as share of the country's GDP are set to decline," Kaneva reiterated.Ī "supercycle" generally refers to a multi-decade period of above trend movement in base metal prices derived from a fundamental structural shift in demand. In a note Monday, JPMorgan Head of Global Commodities Research Natasha Kaneva and her team highlighted that objections to the call had focused on credit cycles outside of China, "green" demand, supply underinvestment driving the next "supercycle" and continued copper stockpiling by China's State Reserve Bureau. The bank now forecasts an average price of $7,700 per metric ton for spot copper in the first quarter of 2021, moving down toward a $6,500/mt average in the fourth quarter, with other base metals following a similar downward trajectory amid still persistent levels of oversupply.
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