The price of copper on Tuesday hit a decade high close to $10,000 a tonne, largely on strong Chinese demand and tight supplies of the metal used in popular electric wiring.
Copper reached $9,965 a tonne on the London Metal Exchange — the highest level since March 2011 – on strike action in the world’s biggest copper producer Chile and owing also to a weaker dollar, according to analysts.
The price has more than doubled since dropping to $4,371 a tonne in March last year as the coronavirus pandemic took hold around the world.
But with major copper consumer China enjoying strong economic recovery, the country’s demand for the metal has also soared.
Copper is meanwhile not far off its all-time record of $10,190 a tonne, achieved in February 2011.
Copper, which has been rising strongly in recent months as a weaker dollar makes it cheaper for buyers holding rival currencies, reached its latest decade high on Tuesday “on worries about supply”, noted Anna Stablum, analyst at Marex Spectron.
“Copper was fuelled higher as Chilean port workers protested against the government’s Covid-19 relief policies and mining unions said they supported the strike,” she added.
In the background is a reduction to investment in the supply side of the mining industry since the boom years of 2003-2013 – and the subsequent lack of new expansion plans of existing mines.
It comes as demand for copper wiring intensifies, notably for the car sector which is increasingly switching to making electrical vehicles.