The Growing Demand and Shrinking Supply of Copper: Key Insights for Investors
The Growing Demand and Shrinking Supply
Copper prices are set to surpass their 2022 highs, driven by aging mines and a lag in new projects. Coupled with persistent inflation in major economies like the US and EU, copper's role is becoming increasingly critical, marking it as a key commodity to watch in 2024.
Global Recognition of Copper’s Strategic Importance
In response to copper's escalating strategic value, the US government established the Minerals Security Partnership (MSP) in 2022, now comprising 14 countries including the US, Canada, Australia, Estonia, Japan, South Korea, Sweden, and the EU. The MSP focuses on advancing critical minerals projects that adhere to ESG standards.
Geopolitical Tensions and Supply Chain Risks
Chile, home to the world's largest copper reserves, faces hurdles like rising operational costs and aging infrastructure. On the other hand, China, the leading consumer and producer of copper, risks production disruptions due to economic instabilities.
Recent Market Dynamics and Analysis
Copper prices on the London Metal Exchange (LME) saw upward momentum in the first quarter of the year on the back of tightening supply and increasing demand from the energy transition.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.