Copper Price Surges to Three-Month High Amid Supply Concerns
The price of copper has jumped to its highest level in three months, fueled by supply shortages and geopolitical tensions, impacting global markets.
Supply Shortages Drive Price Increase
The recent surge in copper prices can be attributed to a restricted supply scenario coupled with renewed risk appetite among investors.
On the London Metal Exchange (LME), copper prices increased by 0.9% to $9,960 per ton, briefly peaking at $9,984, the highest since March 27.
Inventory Levels Plummet
Copper inventories have seen a dramatic decrease this year, dropping by 65%, with U.S. warehouses experiencing a significant reduction in their holdings.
Declining inventories reflect strong demand and constrained supply, further supporting higher prices.
Impact of Chinese Exports
Analysts suggest that the trajectory of Chinese exports will play a crucial role in shaping the future of the international copper market.
China’s status as a major consumer and exporter means its trade policies significantly influence global copper dynamics.
Also, escalating trade tensions between the U.S. and China contribute to market volatility and price fluctuations.
Goldman Sachs Bullish on Copper
Looking ahead, Goldman Sachs projects that copper prices on the LME could reach $10,050 per ton by August. The firm emphasizes copper’s vital role in the ongoing global energy transition. In fact, demand for copper in electric vehicles and renewable energy infrastructure is expected to increase by 53% between 2020 and 2030 (S&P Global 2022).
