In early trade on Wednesday, the copper price for delivery in March was up 1.53% with copper futures exchanging hands for $4.23 per pound ($9,306 a tonne).
The price of the red metal hit a nearly 10-year high this week as analysts expect that surging demand from the power and construction industries will overwhelm supply.
Click here for an interactive chart of copper prices.
The price spike has prompted top financiers from JP Morgan to Goldman Sachs to predict a commodities “supercycle” similar to that of the early 2000s when demand boomed in emerging nations.
“I wouldn’t call it a ‘supercycle’ but there are expectations that we will see about three years of good prices,” said Diego Hernández, president of Chile’s National Mining Society (Sonami), which represents the country’s top miners.
“No one was smart enough in 2020 when it comes to prices. No one was able to predict that the growth would be so dynamic. These times are very interesting when it comes to demand – it is high and is rising,” Polish copper producer KGHM CEO Marcin Chludzinski told Reuters.
In terms of prices, “we can expect a better situation than last year”, he said.
“Copper is the mineral of the moment, of the decade and maybe the next decades,” said Nexa Resources CEO Tito Martins, adding that the Brazilian company is looking to expand its copper assets in the next few years.
Mining firms in Chile, the world’s No.1 copper producer, warned that costs could rise as labor unions and vendors also try to cash in on the trend.
“If negotiations get complex, this could lead to possible stoppages, hitting the copper supply,” said Alejandra Wood, Santiago-based head of the Center for Copper Studies (CESCO).
She added most firms were not likely to dramatically alter investment plans due to the rally, except perhaps fast-tracking some “marginal” projects.
“The challenge they face is not falling into the trap of thinking this scenario will be something long-term, and thus abandoning the discipline of maintaining costs low just to increase production,” she said.
(With files from Reuters)