Prices of copper reach two-year peak
On the Comex exchange on May 13, a sizzling Monday, July copper Futures saw a surge of 2.2%, peaking at $4,766 per pound – the highest since April 18, 2022, as per Dow Jones Market Data. By 12:40 PM Moscow time on May 14, the futures were continuing their climb above the $4,800 mark.
This high-octane rally pushed the all-time high to a blazing $4,9375 per pound on March 4, 2022.
Over the past stuffed-to-the-gills two months, the copper market has seen a smokin' hot escalation of approximately 28%, as reported by MarketWatch.
Never ones to shy away from the action, the London Metal Exchange (LME) closed their three-month copper futures trading on May 13 at $10,185 per ton, with sparks flying during the session as the price touched over $10,200.
The current copper craze is fueled by investors' predictions that global ore mines may struggle to keep up with the explosion in demand. Interestingly, the commodity traders are banking on a mind-bending 1 million-ton hike in copper demand by 2030 due to the development of AI and data centers expansion. It's a wild ride from there: a 35,000-ton deficit is projected for 2024, with the global demand sitting pretty at 26 million tons. By 2025, this deficit is expected to balloon to a whopping 100,000 tons.
The Wall Street Journal points out that copper's red-hot run, along with other commodity stars like record-breaking gold, flashes broad expectations for sustained economic growth and potential inflationary pressures. Adding fuel to the fire, copper plays a pivotal role in the wider economy as a key component in construction and electronics, which underscores the positive outlook on growth.
The tip-tops at Pave Finance attribute the scalding copper price increase to optimism about the global economy's revival, spearheaded by the U.S., and a flicker of hope for a rebound in China's economy. They also hint that those looking to benefit from a constant inflationary pressure are the culprits driving up the copper demand.
Now, if you're curious, here are some factors that generally stir the pot when it comes to copper prices:
- Demand-Supply Balance: The aluminum-like nature of copper makes it crucial for infrastructure development, electric vehicles, and renewable energy systems. When demand soars but supplies can't keep up, it's priced to the moon.
- Global Economic Conditions: Economic growth and the jackhammering of infrastructure investments worldwide can create a never-ending hunger for copper, causing prices to skyrocket.
- Geopolitical Factors: Trade tensions, regional conflicts, and an ever-shifting regulatory landscape can make the supply chain dance like a pinball, influencing the global copper supply and, in turn, its price.
- Commodity Market Dynamics: The rabid, always-ready investors in commodity markets can also trigger price fluctuations in copper, all sleeves rolled up and eyes on the prize.
- The climb in July copper futures on the Comex exchange, reaching $4,800 per pound, indicates a 28% rise over the past two months, as reported by MarketWatch, echoing the industry's robust recovery.
- The London Metal Exchange (LME) continued this trend, with their three-month copper futures closing at $10,185 per ton on May 13, hinting at a growing appetite in the technology sector for copper.
- By 2030, commodity traders are predicting a mind-bending increase of 1 million tons in copper demand, driven by the development of AI and data centers expansion, according to reports from MarketWatch.
- The optimism about the global economy's recovery and the potential for a rebound in China's economy, as observed by Pave Finance, is fueling the current craze in the copper market, with investors anticipating sustained growth and potential inflationary pressures.
