Upward trend in copper soon over?

Copper has always been one of the most sought-after metals, and demand for the semi-precious metal will remain high in the future, as copper is an important raw material in all environmentally friendly technologies.

After the copper price initially rose to a record high in May and then fell back again in the summer, it is now approaching the high again. However, experts believe that the recent copper rally will come to an end next year at the latest.

Copper – important in many sectors of the economy

Copper is one of the semi-precious metals and is needed in many sectors of industry. Besides, it is a sought-after metal for the production of coins and art objects. Traditionally, the metal is used mainly in the construction industry and electrical and plumbing.

However, the reddish metal is becoming increasingly important in environmentally friendly technologies, such as the construction of wind turbines or the manufacture of electric cars. It is estimated that copper demand in so-called “green” technologies could increase by around 20 percent of current demand to about six million tons per year by 2030.

Price slump expected in the coming year

Nevertheless, many experts believe that the copper price could still slump significantly in the coming year. The experts explain the presumed negative price trend primarily by the fact that economic growth in China is slowing down and the supply of copper is steadily increasing. China is the most important market for the metal and therefore largely determines the global demand for copper.

Current share price development only temporarily due to Corona pandemic

The current price high is mainly due to the current supply problems and an associated shortage of copper stocks.

Since March 2020, numerous industries have been affected by Corona-related supply shortages. This generally led to an upward trend in the price of numerous commodities. Interruptions in the supply chains and lower production of the semi-precious metal in some cases also led to a severe shortage of copper stocks.

The progress of the vaccination campaigns and the expected improvement of the economic situation further boosted demand, so that the copper price managed to climb to a record high of $10724.50 per ton in May of this year.

In the summer, however, the copper price slipped back below the US$10000 mark. Now the copper price is approaching the record level again, which is mainly due to the currently low copper stocks. The experts therefore see the current price trend as only a temporary phenomenon.

Prices for other metals will also go down

Commodity experts foresee a downward trend not only for the copper price in the future. According to their estimates, prices for aluminum and nickel will also fall significantly again next year.




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