The metal is considered a bellwether for the global economy,given it’s the world’s third most used metal which is used across multiple key economic sectors. It is particularly important for electricity transmission needed to decarbonise and connect renewables to the grid,alongside electric vehicle development and charging station infrastructure.
ANZ commodity strategist Daniel Hynes said there was “a distinct possibility” copper may not be as reflective of global economic health in future,despite prices falling recently as concerns about economic growth stalling grew as central banks tightened interest rates this month.
“[Copper] has never had the supply side issues that we’ve already seen and are expecting to get even worse over the longer-term. So price sensitivity could deteriorate,” Hynes said.
Loading
Hynes said large “world-class” copper deposits were becoming harder to find,forcing miners to “scour far and wide” to for new supply.
He added that economic concerns would cause copper market volatility in the near future,but the medium to long-term outlook was “very,very positive”.
UBS co-head of mining research Lachlan Shaw said ‘Dr Copper’ would continue to reflect economic conditions broadly,although a “structural change around decarbonisation” would push copper demand and potentially price to historically high levels.