The Price of This Raw Material Could Skyrocket

The Rising Price of Copper: Factors and Forecasts

The current economic landscape, coupled with a strong increase in demand for copper due to its various uses and its central role in the much-debated energy revolution, is driving up futures prices, which are now approaching the highs of 2022 and show no signs of slowing down.

What is Influencing the Price of Copper?

Many experts believe that the price of copper could surpass current levels in 2024 due to the increase in global demand, coupled with a supply that struggles to grow due to ongoing production cuts in major global mines.

Data confirms this trend, with global stocks remaining at 41% while demand continues to rise, mainly driven by increased demand in emerging economies such as India and China.

Why Could Copper Prices Rise?

Copper is a versatile metal widely used in many industries and applications.
It is highly sought after in electronics for its excellent conductivity.
Additionally, it is extensively used in water and gas pipelines, building coverings, and coatings.
One of the key drivers of the increased demand for copper is its use in the renewable energy sector, particularly in solar panels, wind turbines, and electric vehicle batteries.

The commitments made by countries towards decarbonization and/or energy independence have increased significantly with the Russia-Ukraine conflict, promoting renewable energy.
Copper and nickel are the two most essential metals to drive this energy revolution.
Therefore, a positive evolution in the energy transition process could further boost copper demand, pushing prices above current highs.

Contrary to the past, copper is now at the forefront of one of the most impactful trends of the century.
As its importance grows, so does the price of futures.

The Economic Impact on Copper Prices

Another significant factor influencing the price of copper is the current global economic scenario.
Despite a slight decrease, inflation remains relatively high, surpassing levels of the last decade.
Exchange rate fluctuations are also destabilizing markets, with the dollar remaining volatile but at relatively lower values compared to post-Covid boom peaks.

Author: Hermes A.I.

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