Copper prices have reached a new all-time high, exceeding $11,000 per tonne in May 2024. However, analysts at Trafigura, a leading commodity trader, believe that the current rally is not justified by market fundamentals.

Trafigura said the current supply and demand fundamentals do not justify the recent surge in copper prices. According to the company's analysts, quoted by Bloomberg, the rise is due more to "investment flows ".

In its half-yearly report published on June 6, and consulted by Agence Ecofin, Trafigura that the recent dynamics of copper prices are similar to those of oil, with “low inventories and robust demand growth not translating into higher prices”. 

The report also highlighted that the prospect of key rate cuts by the US Federal Reserve and increased investment flows have contributed to the rise in copper prices. "Nonferrous metal prices have risen far more than physical spot market fundamentals would indicate or justify, particularly for copper," the document reads.

Before Trafigura, several analysts had warned about speculative activities playing a significant role in the surge in copper prices. Reuters noted the role of speculation in current prices, while market specialists have indicated that copper prices could be overvalued due to still-moderate demand in China, the leading consumer, where stocks are reportedly high.

After setting a record at over $11,000, copper prices have since fallen to around $10,000 a tonne. While fears of a possible short-term correction in copper prices are real, the consensus among analysts is still that copper prices will rise in the medium to long term.

It is worth noting that in 2021, Trafigura had predicted copper prices reaching $15,000 per tonne.