Copper hits near-decade high as metals prices boom
Come take a look at out our article to learn more about the various factors that have led to the huge price hike in copper and other metals in recent months.
The copper price reached $10,000 a metric ton in April, and this level is the highest since February 2011. The huge rise is similar to that of other commodities as many economies rebound, and miners struggle to keep up with demand.
February 2011 saw the copper price hit an all-time high of $10,190. In May, copper futures on CME Group's Comex in New York reached $4.75 a pound, which surpassed their previous peak of $4.63 in 2011. On the London Metal Exchange, they rose to $10,417 a metric ton, higher than the February 2011 peak.
Prices for other metals, such as aluminum and iron ore, have also risen to record highs. The price rallies are a result of:
- Government stimulus packages. Governments are desperately trying to restart their economies and create new jobs after the global downturn caused by the pandemic.
- Low-interest rates from central banks around the world. With this rate, financial institutions plan to stimulate demand and provide liquidity to markets.
- Economies are rebounding from the pandemic. Factories and other economic activities are picking up after a near standstill.
- The push towards clean energy and zero-emission targets. Copper is the material in electric vehicles, solar power systems, and further straining supplies.
Prices for base metals tumbled at the onset of the pandemic in early 2020. As industries shut down, there was simply no demand. Consumers and governments around the world faced an uncertain future, so spending dipped. With vaccine rollouts speeding up around the globe, demand has surged.
Governments are keen to re-engineer their economies with huge spending, and industries are taking advantage of low-interest rates to expand or retool. Consumers feel more confident in spending their savings; therefore, these activities in markets created an unprecedented demand for commodities. However, the supply has hampered the demand because Covid-19 outbreaks have disrupted south American mines, and insistent shipping difficulties around the world have constrained shipping. With these factors, the copper price can rise to between $11,500 and $12,000 a metric ton over the next few months.
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