Copper price on track for biggest rise in 15 years amid global shortage fears | Commodities
Copper, the metal that underpins the fast-growing renewable energy sector, is on track for its biggest annual price rise in more than 15 years as traders react to fears of global shortages.
Copper, one of the biggest beneficiaries of the “electrification of everything,” has gained more than 35 percent this year, driven by U.S. tariff uncertainty and concerns about mining disasters that could restrict supply.
Analysts said copper has joined silver and gold as a safe haven asset for investors looking to hedge against the falling value of the dollar.
Silver reached a record high on Monday, pushing the value of Mexican mining company Fresnillo, which is traded on the London Stock Exchange, to a record high this month. The gold price is up over 70% since the beginning of January to over $4,400 (£3,263) per ounce.
Kyle Rodda, senior financial market analyst at investment firm Capital.com, said the rise of copper, gold and silver “shows a world marked by greater scarcity and a desire by investors to get their hands on these things in relatively limited supply.”
The price of copper rose above $12,000 a tonne in December following the biggest increase since the global recovery following the 2008 financial crash.
US companies were scrambling to buy copper after Donald Trump threatened to impose additional tariffs on metal imports earlier this year. Tariffs were suspended, but the hoarding effect limited supply in other parts of the world and helped raise global prices.
Copper is often viewed as a barometer for the global economy. It plays a central role in electrical networks, construction and industrial machinery.
China, the largest producer of copper products, prioritized supply assurance, which increased the increase in prices.
On Christmas Day, state-owned miner Jiangxi Copper said it had purchased all shares in London-listed miner SolGold for $1.2 billion, thus gaining control of SolGold’s Cascabel gold and silver mining operation in Ecuador.
Analysts at Goldman Sachs said earlier this month that the price of copper was likely to stabilize in response to figures showing there was enough copper in circulation to meet global demand.
However, concerns have grown in the US and China that short-term hoarding and rising copper demand over the next two decades will mean supply will not be able to keep up, especially as countries look to switch from oil and gas to renewable energy sources that use electricity from wind and solar power plants.
However, recently some mines had to close after accidents.
US miner Freeport-McMoRan said it could not fulfill contracts to customers following the deadly landslide at the vast Grasberg copper and gold mine in Indonesia in September.
