Having become essential in the energy transition, copper is now attracting all attention, generating global enthusiasm comparable to that of gold. Let’s explore together the reasons behind this craze for this metal with multiple virtues!
A record rise in copper prices
In recent years, the price of copper has seen a spectacular surge. The red metal reached a historic high in London at $10,845 per tonne on May 20th. Although it has slightly receded since, it remains up about 15% since the beginning of the year. Experts’ forecasts vary regarding the future trend of copper prices. Some expect a short-term decline, while others anticipate a continued increase in prices, projecting $15,000 by 2030. Some analysts even consider a spectacular rise to $40,000 per tonne in the coming years.
Strongly growing demand
The significant rise in copper prices is largely explained by increasing demand. Indeed, copper has become an indispensable element in the energy transition. With the global shift towards cleaner and more sustainable energy sources, such as wind and solar, the demand for copper is skyrocketing. This metal is used in numerous renewable energy-related equipment, including electrical cables, solar panels, and wind turbines. Consequently, the green energy industry is becoming an important driver of copper demand.
Insufficient supply to meet demand
Despite the opening of new mines, the supply of copper struggles to keep up with increasing demand. According to Christian Mion, a mining expert at the consulting firm EY, speculation around copper is contributing to rising prices. Moreover, the creation of new financial products linked to copper accentuates this price surge. Thus, investors see copper as a safe and lucrative asset. This situation creates tension in the market, leading to an insufficient supply to meet the growing global demand.
Copper, the new “gold” of the energy transition
Copper now plays an essential role in the energy transition. It has become the “new oil” in a world seeking more environmentally friendly energies. Its electrical conductivity, resistance to corrosion, and durability make it an ideal material for the infrastructure of green electricity production and distribution. Without copper, it would be difficult to transport the electricity generated by renewable energies. Thus, copper plays a key role in building a more sustainable and decarbonized future.
Copper is generating global enthusiasm similar to that of gold, due to its crucial role in the energy transition. The record price increase reflects the strong demand linked to renewable energies. However, the current supply is unable to meet this growing demand, leading to increased speculation and market tension. Therefore, copper has become a valuable and indispensable asset for building a greener and more sustainable future.
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