Highest-ever Boom in Copper Amid Clean Energy Transition: Bloomberg

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According to recent analysis by Bloomberg, a New York City-headquartered data and media company, copper surged this week to its highest-ever and copper future prices rose as high as $10,440 a ton in London. This follows the boom in copper spread over the past year, which caused prices to double in the period.

The year 2011 saw the previous copper record being made, when the commodities super-cycle peaked, resulting from China’s rise to economic heavyweight status owing to a huge availability of raw materials. According to investors today, because copper is vital for the world’s upcoming clean energy transition, demand will surge and prices are set to go up.

The Bloomberg analysts find that the reddish brown metal is mostly unrivalled as an electrical and thermal conductor, while also being durable and easy to work with. Today, a vast array of uses in all corners of heavy industry, construction and manufacturing mean it’s a famously reliable indicator for trends in the global economy. The copper market was one of the first to react as Covid emerged in Wuhan, with prices slumping by more than a quarter between January and March last year. Then as China’s unprecedented steps to control the domestic spread of the virus started to yield results, copper rapidly rebounded — and it hasn’t looked back since.

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Even though China is responsible for 50% of the world’s copper consumption and has majorly contributed to copper’s surge, it recorded a decrease in demand this year. The reason why prices have still gone up is partly due to evidence of recoveries in other major industrial economies, with manufacturing output surging in places like the U.S., Germany and Japan. But, the analysts believe, investors have also been piling into copper on a bet that global efforts to cut carbon emissions are going to mean the world needs a lot more of the metal, putting a strain on supply. New mine production may be slow to arrive, as mines are hard to find and expensive to develop.

It is worth noting that electric vehicles contain about four times as much copper as a conventional car, and vast amounts of copper wiring will be needed in roadside chargers to keep them running. Bringing electricity from offshore wind farms to national power grids is also a copper-intensive exercise. Governments around the world have announced ambitious infrastructure investment plans, much of which involves construction, green energy, or both. These factors, among others, explain the recent rise in copper prices.

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