By STUART LISULO
COPPER prices have hit the US $11,000 per metric tonne threshold for the first time, triggered mainly by supply constraints of the commodity on the back of heightened demand.
Prices of the red metal breached the psychological US $11,000 per metric tonne threshold for the first time ever, boosted by tight supply of the commodity on the back of heightened demand.
According to Mining.com, a mining-focused website that monitors metal prices, copper prices surged to a peak of almost US $11,300 per tonne by October 19, induced by “extremely tight” supply and heightened demand for the commodity.
“The copper price continued to rally towards record highs on Tuesday as signs of extremely tight supply outweighed concerns that slowing growth in China will impact demand. Traders were paying huge premiums for quickly deliverable copper after stockpiles in the London Metal Exchange’s (LME) warehouse system tumbled to their lowest level in decades,” Mining.comreports.
“Cash copper on the London Metal Exchange also soared to a new record high overnight. Spot copper jumped 7.2 per cent to $11,299.50 per tonne. Prices of the metal used in power and construction leaped 10 per cent last week and are up and more than 30 per cent this year after gaining 26 per cent in 2020.”
RMB Global Markets and Bloomberg also revealed that prices of the commodity had rallied to their highest point ever after global inventories noticeably shrank.
“Prices have soared past US$11,000/tonne — the highest level ever recorded. Over the past few weeks, base metals have seen a surge in prices, in line with the broader risk-off theme and as higher energy prices have increased their cost of production. Global inventories seem to be quite low, globally, which supports the current elevated levels (at least higher than the US $10,000/tonne). We expect price pressures to remain on copper over the next few weeks until the market adjusts to news of improving supply prospects,” stated RMB/Bloomberg.
The copper price surge represents a near-double increase compared to when prices of the red metal hit a low of around US $5,779 per tonne two years ago in October, 2019.
At the start of last year, copper prices maintained a depressed outlook due to the Coronavirus outbreak, initially discovered in Wuhan city, China, as investors worried that the contagious disease would hit demand in the world’s biggest metals consumer.
But a successful vaccine rollout in developed economies has triggered a global economic rebound that looks set to benefit raw commodity-producing countries like Zambia, as advanced economies press ahead with a shift towards low carbon emitting vehicles from combustion engines.