In fact, most forecasts for copper prices over the next few years continue to be bearish at worst and neutral at best. Second, management outlined it had a «brownfield growth pipeline» of 1.7 billion pounds of copper within eight years, with 400 million pounds able to be added within two to three years. Consequently, Freeport has the potential to invest in projects and take advantage of higher prices or better conditions. Overall, copper gained only 2% last year, following a 14% decline in 2022. So far this year, the base metal’s price is little changed, with a metric ton of copper costing around $8,600, according to prices on the London Metal Exchange. Check the price of copper with Money Metals Exchange’s interactive live and historical chart.
- Some experts, however, predict that copper will start on a bullish trend by 2022.
- Any lingering expectations of surplus supply have now “evaporated,” and been replaced with the prospect of a “significant deficit,” Langsford said.
- The metal was initially used exclusively in its pure state but was later used in the production of other metal alloys.
- It’s mainly used in electrical wiring, roofing, plumbing, and cooking utensils.
- At the same time, CEO Richard Adkerson said, inventories of copper around the world are at historically low levels, «and the inventory levels are really inconsistent with the current copper price.»
As the metal is a key material in the construction industry as well as for consumer goods such as electronics and cars, copper demand tends to be economically sensitive. As such, when the global economy slows down, the demand for the metal usually decreases, negatively weighing on its pricing. Therefore, when making investment decisions, it is important to https://traderoom.info/ consider that the price of copper significantly relies on the wider performance of the global economy. Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances.
If nothing else, copper prices are not expected to take a dramatic downward turn, which is good news for investors. This year has seen copper prices dipping into a trading range, which has yet to resolve to the upside. According to Comex and a number of industry leaders, copper will need to break above 2018’s high, when copper rose to well over $3, to establish a major bull trend. Copper prices have been in a bearish trend recently, and they’re not necessarily expected to rise anytime soon.
Southern Copper (SCCO) Expected to Beat Earnings Estimates: Can the Stock Move Higher?
Calculate your hypothetical P&L if you had opened a CFD trade on a certain date (select a date) and closed on a different date (select a date). If you believe Wordfence should be allowing you access to this site, please let them know using the steps below so they can investigate why this is happening. It’s been used for thousands of years with increasing demand as new technology springs up all over the world. And if mines produce less copper, this means what is available will be that much more valuable.
The global copper supply is fueled by mining and recycling of copper products. When mined, copper is extracted from crushed ore and is furthered refined through smelting. It isn’t just about the price of copper; after all, Freeport still has to produce more to benefit from any positives in the metal’s prices. For miners with existing operations, copper’s tight supply dynamics are good news. But given the long-term demand projections, there’s a conspicuous lack of investment in new supply. That gap is so big that some manufacturers even warn it may put the energy transition at risk.
Copper moves around the world in a variety of forms such as copper ore, raw copper, refined copper and copper wire. Chile and Peru are the largest exporters of copper ore, while China and Japan are its largest buyers. Zambia is the largest exporter of raw copper, while China is its largest buyer.
A stock to buy
Decreasing ore grades, rising costs, water scarcity and social unrest are now impacting balances, the letter said, adding that price dips therefore represent opportunities to buy. The major factors contributing to copper prices are supply and demand, economic growth, inflation, and the value of the dollar. Copper trades on the London Metal Exchange and COMEX, which is now a division under the Chicago Mercantile Exchange. Prices for the most part reflect expectations for global economic growth. At the beginning of 2020, forecasters expected a supply deficit of about 53,000 metric tons.
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These scrap prices are for reference only based on market trends and resources. Copper is a unique commodity that has a distinctive value in the global market due to its industrial worth. Today, it is the world’s third-most-used metal, after iron and aluminium, and plays a pivotal role in all major economies and the developing world. Its utility coupled with a low price makes copper a low-risk investment favoured by international investors. Trading copper offers substantial asset-class diversification, which can be an effective way to lower the overall volatility of a portfolio. While copper prices may seem grim now, this isn’t a permanent indicator of the metal’s value.
In recent years, new technology has caused demand for copper to go up. The automotive industry forms one of the most substantial copper demands in the world, in part due to modern electric vehicles that use copper wiring. Smartphones and electric household appliances and their respective production also require copper parts. Copper’s malleability makes it easy to work with, and it is readily available worldwide despite the growing potential of a copper shortage.
Copper Price (I:CPNMLX4H)
Those bullish bets follow a supply setback that’s just a few months old, with key mines running into trouble at the end of last year. The upshot is that what had looked like a clear case of excess supply has now morphed into a likely deficit, according to Todd Warren, a portfolio manager at Tribeca. Find your state laws and get information you need to avoid problems when scrapping your materials.
This was down significantly from $6,340 at the start of the year. The steep drop was attributed to macroeconomic factors and concerns stemming from the coronavirus pandemic. square of nine By May 2020, the price of copper had recovered to more than $5,200 per metric ton. The price of copper is largely influenced by the health of the global economy.
This is due to its widespread applications in all sectors of the economy, such as power generation and transmission, construction, factory equipment and electronics. Sometimes referred to as Doctor Copper, the base metal is seen as a reliable leading indicator. A rising market price suggests strong economic health, while a decline suggests the opposite. In a year of slowing global growth, Freeport has maintained an excellent level of profitability and has several catalysts enabling it to benefit from any copper price increase. As such, the stock remains an excellent choice for commodity investors.
Copper has been a valuable commodity for thousands of years, and its uses have only increased as more industries appear. That said, most economic forecasters predict slightly slower global growth in 2024, which could weigh on demand growth. As always, there are puts and takes when looking at commodities.
