Copper prices for the May and June U.S. contracts both reached $5 per pound this week. This surge is fueled by ongoing and anticipated demand for data centres and electricity.
Additionally, China’s economic recovery is boosting its demand for copper, which accounts for about half of the global consumption.
The outlook continues to be promising. Last month, Goldman Sachs described copper as being at “the foothills of what will be its Everest.” With prices breaking through the 2022 highs and reaching $5, the market’s trajectory appears strong. However, price fluctuations remain, with copper opening at $4.80, climbing to $5.04, and then pulling back to $4.91. Closing above $5 would strengthen the confidence of market optimists.
Ultimately, the market dynamics will be governed by supply and demand. For those bullish on copper, the most significant factor is the investment pipeline. Developing a new copper mine can take 10-15 years, making immediate responses to price increases limited to enhanced recycling efforts.
This restrained supply response is dwarfed by the potentially relentless demand for green energy solutions, power transmission, data centres, electric vehicles, and even weaponry.
