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Copper prices hit an all-time high on Friday in the final stage of a broad rise in commodity markets caused by the reopening of major economies and growing demand for minerals needed for the green energy transition.
Copper, which was used from electric vehicles to washing machines, rose 1.4 percent to $ 10,361 per tonne, surpassing its forecast high in 2011 at the height of a previous boom. of commodities.
The price has doubled more than the pandemic lows of March last year due to the voracious demand of China, the largest consumer of metal, and also investors who want to bet on a large rise in the price. the world economy and protect their portfolios against the potential for growth. inflation.
Government stimulus packages and the shift to electrification to meet the goals of the Paris agreement on climate change are expected to fuel metal demand, which analysts and industry executives i think it could reach $ 15,000 per ton in 2025.
“Our customers’ capacity utilization rates are the highest in a decade and that’s before stimulus money in Europe and the United States has started to flow, ”said Kostas Bintas, head of copper trading of Trafigura, one of the largest independent commodity traders in the world. “That will be significant.”
He added that the United States and Europe were becoming important factors in copper consumption for the first time in decades. “Before, it was a story only in China. This is changing rapidly. “
Concern about the long-term supply of copper due to the lack of investment from large miners has also raised prices. There are only a few large projects in development, while most of the world’s easy-to-produce copper has already been mined.
“The current pipeline of projects that are likely to start production in the coming years accounts for only 2.3% of the planned supply of mines,” said Daniel Haynes, an analyst at banking group ANZ. “This is much lower than previous cycles, including 2010-13, when it reached 12%.”
He upward gear of other raw materials shows no signs of decline. Iron ore for steelmaking was quoted for the first time at $ 212.75 a tonne as China returned to work after the Labor Day holiday in early May.
Despite production cuts in Tangshan and Handan, two key steel cities in China, analysts expect production to remain solid over the next two quarters.
“Recent production cuts in Tangshan have boosted demand for higher quality ore and caused factories to build iron ore inventories as their margins increase and steel supply is restricted,” said Erik Hedborg , chief analyst of the CRU group.
“Iron ore producers enjoy exceptionally high margins, as about two-thirds of the marine supply only requires prices of $ 50 per tonne to match.”
Elsewhere, the pond on Thursday rose above $ 30,000 a tonne for the first time in a decade before relaxing. Tin is used for welding, the substance that binds circuit boards and wiring, and benefits from strong demand from the electronics industry, which has been seen to be high by a growing number of home workers.
Timber prices in the U.S. continued to rise before the peak of the U.S. housing construction season in the summer, with timber futures hitting a record high above $ 1,600 per 1,000 feet in length , from $ 330 this year.
Agricultural commodities also continued to rise as a result of a particularly dry season in Brazil, drought concerns in the US and Chinese demand. Strong increases in food prices have begun to affect global consumers. Corn climbed to an eight-year high of $ 7.68 this week, while coffee has risen nearly 10% since the beginning of the month, reaching a four-year high of $ 1. $ 54 a pound this week.
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