The chart of the week shows changes in the market price of another important commodity, namely copper, which some consider the “new oil”.
The price of copper started to climb to 4.6 USD (US dollars) per pound, which means that it reached 10,000 USD per ton.
It’s a similar price to two years ago. Speculative pressures appear to be behind the price increase. It is obvious that there are problems with the offer. On the other hand, copper is key to supporting renewables. The American company Goldman Sachs even came up with the slogan “copper is the new oil.” If electrification including electric cars or wind farms is to continue, then copper is a key component.
The supply side is constrained by the closure of the major copper mine Cobre Panama. In Zambia, mining activities are suspended due to power outages. Due to political protests, mining is also threatened in Latin America.
Copper processors in China, which is of global importance, have complained about low margins, leading to a decision to cut output by 10% a year.
It must not be forgotten that the opening of new mines is very financially demanding. It seems that for these reasons as well, companies in the sector have now decided more towards concentration, i.e. for mergers and acquisitions.
