Copper prices are rising rapidly in early 2024 and are already over $8,200 per ton. Markets are waiting for new price highs, calling copper the “new generation oil.”
By the end of 2023, analysts have named copper as the metal that is most actively rising in price. This metal has become a pleasant exception among other similar resources – aluminum, lead and zinc, which have responded to high interest rates from the American financial regulator with a reduction in prices and an increase in the supply of most metals in the world market
There are several reasons for the rise in copper prices. One of these is the increase in global demand for metals, which is caused by the transition of several countries around the world to energy sources that are more environmentally friendly than oil, for example. Copper is already actively used, in particular, in electric vehicles and electrical equipment
Important! By 2030, 60 countries around the world plan to triple their renewable energy capacity. Therefore, the demand for copper will continue to grow, and the metal has the potential to become a truly “new generation oil”, as it will essentially replace already known sources of energy.
At the same time, on the contrary, the supply of copper is decreasing. American investment bank Goldman Sachs has predicted that the shortage of this metal in 2024 will be 500 thousand tons. Such expectations are due to the fact that in the fall of 2023, First Quantum Minerals stops mining copper in one of the world’s largest deposits in Panama
Another factor affecting the dynamics of copper prices is the negative dynamics of the dollar exchange rate. A weak US currency usually causes copper prices to rise. Since metal quotes are denominated in dollars, a weak exchange rate leads to an increase in their value. Markets now expect the dollar to weaken against major currencies as the US Federal Reserve begins to ease its policy on key rates
