Why Is Copper Price Rising

Copper prices hit record highs this week, driven by rising demand for the red metal in renewable energy, EVs, and grid infrastructure projects. The rally is expected to continue as supply struggles to keep pace with the green energy revolution.

Copper Supply Shortage Leads To Higher Prices

The copper market flipped from surplus to deficit after the closure of the massive Cobre Panama mine. Additionally, Chinese smelter output cuts due to concentrate shortages further tightened supply. This confluence of factors sent copper prices skyrocketing.

Analysts predict a sustained bull market for copper, with prices potentially holding above $4/pound. Many copper equities are already trading near 52-week highs, which shows investor confidence in the sector.

Why Copper Is Important

Copper's unique properties:

• high conductivity,
• thermal efficiency,
• and recyclability

make it irreplaceable for solar, wind, and EV technologies. As the world moves towards net-zero emissions, demand for copper is forecast to significantly outstrip supply.

To meet decarbonization goals, copper demand may need to double by 2035. Even conservative estimates forecast a 33% demand rise in the next decade, driven by massive green energy investments.

Meeting this rising demand requires substantial investments in copper production and recycling. However, expanding mining faces challenges - declining ore grades and environmental concerns.

Closing the projected 8 million ton copper gap by decade would require a staggering $150 billion investment, likely pushing prices to record highs.

Copper Technical Analysis

The price of copper is on a strong upward trend.

It recently broke above a key support level at $4.75 and even surpassed its previous all-time high, reaching $5.07. This momentum suggests the price will likely keep climbing.

Analysts expect copper to target $5.16 next, and if it breaks through that level, it could surge even higher, potentially reaching $5.58 in the near future.

In the short term, the price is expected to trade between $4.88 and $5.16. Overall, the forecast for copper is bullish, with the expectation of continued price increases.

China’s Real Estate Challenges: Impact on Copper Prices

China's economic recovery, especially problems in the real estate sector, are creating problems for copper prices. Despite positive expectations, the Chinese government is prioritizing “high-quality development,” potentially reducing demand.

However, analysts remain bullish on copper's long-term outlook. Supply-demand imbalances, the US rate-cutting cycle, and booming green energy sectors are expected to move copper prices further.

Analysts project copper to average $8,800-$8,950 per ton in 2024, rising to $9,050-$9,300 per ton in 2025. Long-term forecasts remain high due to the energy transition's insatiable demand for copper.

Bottom Line on Copper Supplies

As copper becomes increasingly important to the global economy, countries are struggling to ensure access to limited supplies in the future. This struggle highlights the strategic importance of sourcing and refining capabilities for this critical metal.

The copper bull run is likely here to stay, driven by the relentless green energy push. To achieve net zero goals and power the clean energy transition, it’s crucial to make strategic investments in copper supply.