Prices of copper hit two-year peak.
Copper Prices Soaring: A Closer Look at the Global Market
The three-month copper futures price saw a significant surge on Friday, April 12, reaching an impressive $9,590.50 per ton on the London Metal Exchange (LME). This represents a impressive 2.7% rise from the previous day. By 6:00 PM Moscow time, however, the price had dipped slightly to $9,496 (+1.64%). Simultaneously, on the New York Mercantile Exchange (NYMEX), May copper futures gained nearly 2%, reaching $4.3622 per pound before dropping to $4.3240 (+1.4%) by the same time.
This rally in copper prices is driven by investor optimism regarding the global shortage of ore supplies in the face of growing demand. Data released on Friday highlighted a 16% year-on-year increase in Chinese imports, with 474,000 tons imported and a 6.9% year-to-date growth rate. These figures have further bolstered investor sentiment.
Bloomberg reports that the optimism is additionally fueled by data suggesting an increase in business activity in China's manufacturing sector, marking the first growth since September 2023.
Commodity traders anticipate a substantial increase in copper demand by 2030, primarily due to the development of AI and the expansion of data centers. However, a deficit of 35,000 tons is projected for 2024, with global demand projected to reach 26 million tons. This deficit is expected to grow to 100,000 tons by 2025.
The Wall Street Journal notes that copper's rally, along with other commodities like gold, signifies broad expectations for sustained economic growth and potential inflationary pressures. Given its role in construction and electronics production, copper also serves as an economic indicator.
Copper's Future Outlook
While global copper mine production is expected to increase by approximately 2.3% in 2025, reaching roughly 23.5 million tons, analysts have expressed concern about the sustainability of the projected supply growth due to underinvestment in exploration and the difficulty of bringing new supply online quickly enough to meet demand.
The demand for copper, driven by the expansion of renewable energy technology and infrastructure spending in major economies, is expected to continue growing in the long term, resulting in a tightening market and likely higher prices by 2030. The global market for oxygen-free copper alone is projected to grow from a valuation of US$22.3 billion in 2024 to US$29.5 billion by 2030, at a compound annual growth rate (CAGR) of 4.7%.
Overall, by 2030, copper demand is expected to significantly increase, driven by decarbonization efforts and infrastructure needs, while supply growth will remain relatively constrained, causing a tightening market and likely higher prices.
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The surge in copper prices, as observed in both the London Metal Exchange and the New York Mercantile Exchange, can be attributed to investor optimism related to the global shortage of ore supplies and increasing demand, particularly in the technology industry, where copper is essential for the development of AI and data centers.
By 2030, analysts predict a substantial increase in copper demand, primarily due to the growth of renewable energy technology and infrastructure spending, while supply growth may remain relatively constrained, leading to a potential market tightening and higher prices for copper.
