Copper is poised to record its largest annual price increase in more than 15 years as traders respond to mounting concerns over global supply shortages. The metal, which serves as a critical component in the rapidly expanding renewable energy sector, has appreciated by more than 35 per cent in value over the course of the year.
The substantial price appreciation stems from multiple factors, including uncertainty surrounding United States tariff policy and apprehensions regarding mining disruptions that threaten to constrain supply. Market analysts have observed that copper has assumed a new role alongside silver and gold as a safe-haven asset for investors seeking protection against dollar depreciation.
Silver achieved a record high on Monday, propelling shares of Mexican mining company Fresnillo, listed on the London Stock Exchange, to unprecedented levels this month. Gold prices have surged above 4,400 dollars per ounce, representing an increase of more than 70 per cent since January.
Kyle Rodda, senior financial market analyst at investment firm Capital.com, characterised the simultaneous rise of copper, gold and silver as indicative of “a world marked by greater scarcity and investors’ desire to get their hands on things with relatively limited supply”.
Copper prices climbed above 12,000 dollars per tonne in December, marking the most significant increase since the global economic recovery that followed the 2008 financial crisis. United States companies engaged in substantial copper purchasing earlier in the year after President Donald Trump threatened to impose additional tariffs on metal imports. Whilst the tariffs were subsequently suspended, the resulting stockpiling effect has limited availability in other global regions and contributed to elevated worldwide prices.
The metal is widely regarded as a barometer for global economic health given its central role in power grids, construction projects and industrial machinery. China, the world’s largest manufacturer of copper products, has prioritised securing supplies, adding further upward pressure on prices.
On Christmas Day, state-owned enterprise Jiangxi Copper announced the acquisition of all shares in London-listed mining firm SolGold for 1.2 billion dollars, securing control of the Cascabel gold and silver mining operation in Ecuador.
Goldman Sachs analysts indicated earlier this month that copper prices were likely to stabilise in response to data suggesting sufficient circulating supply to meet current global demand. Nevertheless, concerns have intensified that short-term stockpiling in the United States and China, combined with projected demand growth over the next two decades, will result in supply failing to maintain pace with requirements. This situation appears particularly acute as nations pursue transitions from fossil fuels to renewable energy sources such as wind and solar installations.
Recent mine closures following accidents have exacerbated supply concerns. United States miner Freeport-McMoRan disclosed in September that it would be unable to fulfil customer contracts following a fatal mudslide at its extensive Grasberg copper and gold mine in Indonesia.
