With the coming of the New Year, one of the most popular questions amongst investors is: when will copper go up? This is because copper is an essential metal that has countless industrial and commercial uses. From wiring in aircrafts and airplanes to being a component of electronics, copper plays an important role in modern life.
Unprecedented global demand coupled with relatively scarce resources have caused copper supply to lag behind demand. This has caused its prices to be volatile, rising and plunging in a matter of days. According to a new report from the US Geological Survey (USGS), global copper production increased by 6.9% in 2020, due to increased production from China. However, this increase in production is still failing to meet global demand, as industrial and environmental conditions have limited other copper-producing nations from extracting their resources.
It is predicted that copper prices could begin to rise in the near future due to slowed production. The USGS report states that China’s copper production is expected to slow down by 4.9% in 2021. In addition, analysts at Goldman Sachs have Observed that the copper market is “becoming increasingly tight” due to this demand and supply imbalance.
This lack of supply is expected to cause premium prices for copper in 2021. In addition, a recovery in global economies caused by the COVID-19 vaccine could see further copper price increases as they could result in increased demand from the construction and manufacturing sectors.
Overall, critics are predicting that copper prices could reach a peak by the end of 2023 if the current supply and demand balance continues. This would be due to the overall global economic recovery and the decreased copper production from China. As a result, investors can expect to make significant returns if they invest in copper now. However, it is important to keep in mind that the future of the copper market remains uncertain, and that investors should always exercise due diligence before making any investments.