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[Ferro-Alloys.com] The copper price is likely to finish 2021 lower than its current level. However, they could yet see some further gains in the year, industry watchers told MetalMiner.
“It’s sentiment-driven,” one analyst said about current prices for the base metal and the prospect for increases in them over the year.
Copper could achieve $15,000 for a short while, a second analyst said, but warned that it would not be unsustainable.
Sustained higher prices could also impede rollouts of new electric vehicles. As such, the ongoing “environmental revolution” would precede at a much slower pace, the first source added.
“It would lose so much demand to aluminum in terms of cabling,” which is notably cheaper, the first analyst said about continuing rises in prices.
Copper on the London Metal Exchange (LME) has sharply risen on the year. LME three-month copper reached a high of $10,724.50 per metric ton on May 10. That more than doubled the $5,266 reported on May 11, 2020.
That price has since fallen, however. The copper price finished Monday at $9,868 per metric ton on news that the China’s National Development and Reform Commission warned commodity companies against pushing up prices by maintaining “normal market order.”
COVID impact on copper prices
The COVID-19 global pandemic’s impact on copper mining and production in South America also prompted many mines and refiners on that continent to either curtail their production or completely down tools in Q1 and Q2 of 2020. In turn, that led to supply disruptions and, furthermore, higher prices.
Logistics disruptions also helped to push up copper prices, the second analyst added.
High demand as the global economy recovers from the COVID-19 global pandemic may have also helped to boost prices. Political events in South America could now help them to rise further.
Pedro Castillo, the socialist candidate for Peru’s upcoming presidential election on June 6, has spoken about his plans to raise taxes and royalties. He has also proposed renegotiating contracts with large companies if elected.
Castillo’s potential move is similar to Chile’s Constitutional Convention, which convened in May to rewrite the South American state’s primary legal document and envisions a progressive tax of at least 3% on copper and lithium sales.
Events in South America are not the only determining factor for the higher prices. Several other situations around the world are also boosting prices for the metal.
source:MetalMiner
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- [Editor:李慧]
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