Copper prices crossed the $10,000 per ton mark on Friday for the first time in two years amid speculation that mines around the world will have problems meeting a wave of demand from green industries, reports Bloomberg.
In Friday morning trading on the London Metal Exchange (LME), copper futures rose 1.4% to $10,028 a tonne, the highest level since April 2022. As a result of the latest advance, benchmark copper prices are up 17% this year.
Traders are optimistic about the demand for copper, given that in the coming years it will be necessary to increase deliveries by several million tons, to produce the copper cables that will be used in electric vehicles, renewable energies and the expansion of electrical networks. precisely at a time when it becomes more expensive to build or expand large copper mines.
Olivia Markham of the BlackRock World Mining Fund estimates that it would take a ton of copper to reach $12,000 for large-scale investment in new mines to avoid future shortages.
However, some market participants draw attention to the gap between the optimistic positions on the futures markets and the more cautious picture on the physical copper transactions market. On the latter, trading premiums are falling, inventories remain high and spot prices have been lower than futures quotes for longer, suggesting that supply is at an adequate level.
Evidence of the attractiveness of copper assets is that mining group BHP Group Ltd. has launched a takeover bid for rival Anglo American Plc, a deal that would create the world’s largest copper producer, responsible for about 10% of supply world copper ore. However, Anglo American’s management on Friday rejected the $39 billion takeover offer made by BHP Group, on the grounds that the price per share offered does not reflect Anglo American’s true value and future prospects.
Tags: Copper rapidly rising price world Electric cars green sources put pressure price
