Copper has gained 26% so far this year and this week hit $9,758 a tonne, its highest level since the summer of 2011. Copper got a big boost last year from Chinese infrastructure building. Now the US is following suit, says Myra Saefong for MarketWatch. Joe Biden’s $2.3trn infrastructure package and green energy plans will require massive quantities of copper wiring.
The virus also accelerated the advent of the digital economy, says Rob Haworth of U.S. Bank Wealth Management. “Semiconductors, data centres and cellular towers” all need copper. Supply is not rising fast enough to meet demand. Miners have underinvested in new capacity in recent years and developing new mines is a lengthy process.
It’s not just copper, says Bloomberg News. Aluminium and iron-ore prices have also been making new multi-year highs. “The super part of the copper supercycle is happening right now,” says Max Layton of Citigroup. Global efforts towards decarbonisation could see metals continue to trade strongly.
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Analysts at Goldman Sachs recently declared copper to be “the new oil”. The bank thinks that mass electrification could see demand for the metal rise by “up to 900%” come 2030, depending upon how fast green technologies are adopted. Commodities trader Trafigura thinks the metal could trade as high as $15,000 a tonne over the coming decade.
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