Copper demand has surged: prices have reached historical highs

Copper wires remain a key component in modern electronics and energy. At the beginning of 2024, their price on the London exchange exceeded $13,700 per ton, repeating the record set in January. This increase is linked to a sharp rise in the need for the metal, driven by the expansion of artificial intelligence infrastructure.

In addition to rising demand, supply has faced a number of constraints. The Grasberg mine in Indonesia, the second largest in the world, reduced its output after a major landslide in September of last year. The initial plan to bring the facility to 85% capacity in the current half-year has been revised to 65%.

Political nuances also affect the market. In July, representatives of the American administration hinted at a possible introduction of a 15% tariff on imports of refined copper in 2027. Although there is no official decision yet, such signals increase uncertainty among traders.

Trade and Stocks

The volume of copper transactions on the American COMEX exchange has increased by more than 40% since the beginning of the year. On the London market, copper stocks have decreased to a level typical for five months due to the outflow of raw materials to the USA.

Electric vehicles add additional momentum to demand: they require four times more copper than traditional internal combustion engine vehicles. This factor intensifies pressure on global supplies.

In China, the copper shortage is particularly acute. By the end of July, stocks on the Shanghai Futures Exchange fell to a two-and-a-half-year low of 69,000 tons, which is 80% less than in March. Despite China remaining the largest copper producer, a significant portion of the output is exported to the USA, exacerbating the domestic shortage.

Copper ingot imports to China in June reached 280,000 tons — the highest level in nine months, and prices for imported metal reached historical highs, confirming the acute shortage in the domestic market.

Source: 3DNews