According to the S&P global report "The Future of Copper," demand for copper will rise from 25 million metric tonnes (MMt) in 2021 to 49 MMt in 2035, driven mostly by renewable energy and electric vehicles.
Copper finished Friday at $3.3865 and has been in a downturn for some time. The 52-week high for the stock is $ 4.9375, and the 52-week low is $ 3.2115. The copper price fell following the release of the US employment data, but this is not the complete picture. Let's look at the forces influencing copper and what the future holds for the copper market.
The London Metal Exchange(LME) has announced that it would limit new copper and zinc supplies fromRussia's Ural Mining & Metallurgical Co. According to the latest LME data,inventories have increased to 143,775 mt, a four-month high. The mining picturedoes not seem positive, as large miners limit production and solve bottlenecks,causing severe supply chain disruptions. Chile's overall copper output declined10.2% in August to 415,500 tonnes. Although this poses short-term supplyissues, initiatives and plans are being developed to address long-term copperdemand. Companies such as Vale are considering selling a 10 to 15% share inorder to increase copper supply to meet rising demand.
A variety of variables have lately influenced pricing. For starters, rising inflation and interest rates make it difficult for companies to obtain raw materials needed for manufacturing, raising the companies' operational costs. Second, the UK's faltering economy and energy crises represent a danger to the global copper market. Third, the US monetary policy and economic resiliency have driven US Dollar prices to decades highs, which often has a negative impact on the copper price owing to rising expenses. In summary, current recession worries and a weakening in the manufacturing sector in the eurozone and Asia have pushed copper prices lower.
According to the S&P global report "The Future of Copper," demand for copper will rise from 25 million metric tonnes (MMt) in 2021 to 49 MMt in 2035, driven mostly by renewable energy and electric vehicles. The report also estimates two supply scenarios, with copper anticipated to fall short by 1.6MMt to 9.9 MMt in 2035 in optimistic to pessimistic scenarios. Although this is all excellent news for copper in the long run, changing geopolitical tensions and the economic environment will make things more difficult in the short term.