Chronicle of raw materials
Copper: Vigorous demand and short supply of the red metal pushes prices up
Audio 01:38
Since the beginning of the year, the price of copper has risen by around 7% on the London Metal Exchange.
Getty Images/Xvision
By: Altin Lazaj
2 mins
The price of copper has been rising since the beginning of the year due to a drop in production in Chile and the conflict in Ukraine.
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Despite a slight drop in prices yesterday, the price of copper remains strong.
Since the beginning of the year, it has risen by around 7% on the London Metal Exchange, which is the world reference, where it exceeded 10,500 dollars per tonne on Tuesday, close to its highest level reached there. 4 weeks ago.
Main reason for this rise in the price of copper, the fall in production in Chile, the world's largest producer, which recorded a drop of 7.5% in February.
The other reason is the prospect of increased Western sanctions against Moscow due to the conflict in Ukraine.
Although Russia is not a major player, the country produced 3.5% of the world's refined copper last year.
Investors therefore fear further disruption in supply chains.
One phenomenon that could slow down the progression of metal prices is the risk of a slowdown in global growth due to the war in Ukraine.
Copper, which is considered the thermometer of the world economy because of its multiple industrial uses, could also suffer from a drop in Chinese demand.
The Middle Kingdom, the world's largest importer of the red metal, is currently facing an upsurge in Covid-19, which threatens its economic growth.
But for the year as a whole, the experts are confident that the price of copper will remain high despite the current market volatility, for two reasons.
The energy transition in progress which inflates the demand and on the other hand a deficit supply.
The red metal is an essential element in achieving a low-carbon economy, whether in new electric vehicles, wind turbines or wiring.
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