The coronavirus pandemic is set to pave the way for “the age of copper,” according to the director of energy, climate and resources at Eurasia Group, as governments double down on investments that will drive up demand for the red metal.
The commodity, which is widely seen as a bellwether for the general state of the economy, has taken a hit during the coronavirus crisis.
Slumping demand drove prices down at the height of the pandemic in March. However, benchmark copper on the London Metal Exchange was trading around $5,909 per metric ton Tuesday, up 0.5%. That’s close to its five-month high of $5,928 hit earlier this month, Reuters reported.
Eurasia Group’s Henning Gloystein said in a research note on Tuesday that the pandemic is expected to accelerate trends in government-supported environmental investments and digitalization, which “heralds a coming boom in copper demand.”
“Huge green and digital stimulus programs, especially in Asia and Europe, will create the conditions for a boom in copper demand — electric vehicles, 5G networks, and renewable power generation all require large amounts of the red metal,” Gloystein said.
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