Copper prices jumped again on Thursday on bets that the trend of rising demand remains intact despite hard-to-read daily market gyrations.
Copper for delivery in May jumped as much as 2.57%, with futures touching $4.137 per pound ($9,101 a tonne) on the Comex market in New York.
Copper surged to the highest in almost a decade last month on strong Chinese buying and as investors poured into commodities on the prospect that vaccinations and stimulus would unlock a sharp global recovery. Since then, futures have retreated about 6% as the dollar and bond yields rose.
“I don’t think there is one single cause behind that little drop in the price,” Chile’s Energy and Mining Minister Juan Carlos Jobet told Bloomberg when asked if he’d noticed any cooling in Chinese demand. “To be honest, I’m not giving a lot of attention to day-to-day movements in the price.”
“In the medium term, as renewable energy and electro-mobility agendas accelerate, the demand for copper will go up, and that is the most permanent trend,” Jobet said.
Chile calculates $74 billion in projects in the pipeline over the next decade.
In 2021, top producer Peru’s copper production is also forecast to bounce back by 10.4%, to reach 2.4 million tonnes, and then 3.1 million tonnes by 2024, equivalent to a compound annual growth rate of 9.2% from 2021-2024, according to Global Data.
“The growth will be largely supported by production from the existing portfolio of operating mines including Cerro Verde, Las Bambas, Toromocho, Antapaccay, and Constancia, as output recovers to pre-covid-19 production levels,” said the data and analytics company.
On Wednesday, the chairman of Chinese metals trader Maike Group said that copper prices will surge to an all-time high over the next 12 months as a result of strong demand from China’s clean energy drive and years of under-investment in global mine supply.
(With files from Bloomberg and Reuters)