Under the dual effects of the recent global economic recovery and surge in demand from emerging industries, copper prices have experienced a strong rise.
Under the dual effects of the recent global economic recovery and surge in demand from emerging industries, copper prices have experienced a strong rise. Last week, the short squeeze in U.S. copper futures continued: the price of copper futures on the New York Mercantile Exchange (COMEX) soared, once reaching a record high. The main closing price last Friday reached US$11,200 per ton, up 9% in a single week .It continues to hover at historical highs, with a cumulative increase of 38% since the beginning of this year. At the same time, the London Metal Exchange (LME) copper futures price also set a new historical record, showing that the global copper market is in a hot state.
Behind the rise in copper prices, the imbalance between supply and demand has become the main driver.On the one hand, the demand for copper in the global manufacturing and new energy industries continues to be strong. In particular, the rapid development of emerging industries such as pure electric vehicles (EV), renewable energy facilities and artificial intelligence (AI) has increased copper demand significantly. The increased demand brought about by emerging areas may have a more obvious impact on copper prices. At the same time, the rise of emerging regional economies such as India, Vietnam, Mexico, etc. will have a significant impact on the supply and demand pattern of commodities, thus driving up the price of copper. According to Jeff Currie, former head of commodities research at Goldman Sachs, copper prices will continue to rise sharply against the background of the imbalance between global copper mine supply and demand.
In 2024, global copper mine production will face multiple challenges, including a Brazilian court suspending the operating license of Vale's Sossego copper mine, Zambia's power shortage, and the COMMUS SAS copper and cobalt mine in the Democratic Republic of the Congo being forced to close due to excessive radiation levels. These disturbing factors have further tightened the supply of copper mines, further pushing up copper prices.
Overall, the reason for this round of continued rise in copper prices is the imbalance between supply and demand and the surge in demand from emerging industries. Although market speculation may trigger the risk of a correction in the short term, in the long term, the upward trend of copper prices remains unchanged. Against the background of global economic recovery and the rapid development of the new energy industry, copper, as an important industrial metal, still has broad demand prospects. At the same time, the market also needs to pay attention to the impact of factors such as disturbances in copper mine production and premium changes between COMEX copper prices and LME copper prices on copper price trends.