Copper surges towards record highs amid optimistic demand outlook – by Tina Teng (Euro News – May 15, 2024)

Renewable energy, electric cars, and artificial intelligence (AI) are bolstering the demand outlook for copper, leading to a surge in the price of the industrial metal towards a new record high.

Copper prices have been soaring since the beginning of this year, rising by 29% year-to-date. Copper futures at COMEX traded at $5 per pound as of 15 May, marking the highest level since March 2022 when the base metal’s price reached an all-time high.

BHP’s takeover offer to Anglo American has brought attention to the prosperous copper mine sector. The transition towards green energy, the rise of electric cars, and the AI boom have all contributed to a surge in demand for copper. However, underinvestment in base metal mining could exacerbate the issue of undersupply in the coming years.

China plays a key role in copper’s supply chain

The immediate catalyst for the price surge could be attributed to China’s recent measures to stimulate the economy. The Chinese Finance Ministry announced plans to issue 1 trillion yuan of ultra-long bonds for investment in infrastructure. This news led to a spike in copper prices on Tuesday, given China’s status as the largest importer of copper.

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