Copper prices soared to their highest level in two years on Friday, buoyed by indications of a more constrained supply-demand balance in China, the world’s foremost consumer of the metal.
Three-month copper futures on the London Metal Exchange briefly breached the $10,000 per tonne mark. The versatile red metal, utilized in a myriad of applications ranging from residential construction to electric vehicles, has surged by approximately 20% since the beginning of the year.
Copper jumps to highest price since April 2022 (Graph)
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The price surge is fueled by supply constraints in China, where reports surfaced in March revealing that major smelters had orchestrated a synchronized production cut in response to diminishing processing fees for the metal.
On the demand side, China, responsible for over half of global copper consumption, posted unexpectedly robust gross domestic product (GDP) growth in the January-March quarter last week, alleviating concerns about its economic trajectory.
An analyst at Mizuho Bank noted that with the dollar index, a gauge of the dollar’s strength against other major currencies, showing a slight decline compared to mid-April, investors may be actively seeking opportunities in nonferrous metals futures markets, possibly driving the uptick in copper prices.
Additional Info
The top copper-producing countries in the world vary depending on factors such as geological resources, mining infrastructure, and economic policies. As of recent data, the leading copper-producing countries include:
- Chile: Chile consistently ranks as the top copper producer globally. Its vast copper reserves and well-established mining industry contribute significantly to its production output.
- Peru: Peru is another major player in the copper market, with extensive copper deposits and a long history of mining activities. The country’s copper production is a crucial component of its economy.
- China: While China is primarily known as the largest consumer of copper, it also boasts significant production capacity. The country’s mining operations, coupled with its industrial demand, make it a key player in the global copper market.
- United States: The United States is a notable copper producer, particularly in states like Arizona, Utah, and New Mexico. The country’s mining sector contributes to its domestic supply and supports various industries.
