Concerned About the Drastic Increase in Copper Pricing Over the Last 1-2 Years?

Dustin Smith
April 4, 2022

If you are reading this article, it is likely that the price of copper has been a point of concern for you over the last couple of years. Since the onset of the Covid pandemic in 2020, Copper has experienced an unprecedented upswing in pricing that has wreaked havoc on all aspects of the supply chain. One might assume this increase is in direct response to the Covid shutdowns. While the pandemic was a contributor to the surge in pricing across multiple commodities, it appears there are additional underlying factors that attributed and will continue to attribute to copper's bullish position.

As mentioned in a recent article from Goldman Sachs, anemic global inventory levels coupled with an increase in infrastructure investment and technological advancements made in electric vehicles and renewable energy are creating the perfect storm for copper with low inventory levels and explosive pricing for the foreseeable future. For example, current copper inventories sit at 200,000 tons – scarcely enough to cover three days of global consumption. To exasperate this issue, in mid-October of 2021 LME (London Metal Exchange) inventory levels were the lowest since 1974. A depleted inventory combined with an uptick from industries with high copper consumption translate into a scenario where some experts predict Copper to rise to $15,000 ton ($6.80/lbs.) by 2025.  

In summary, with multiple external factors at play, copper is in a position to remain a wild card for the global economy. If you are interested in understanding what options might be available to mitigate your exposure and risk, please reach out to a Copperweld representative for more information on its product offerings and how it can help bring stability to the chaotic commodities market.

Further reading:

Goldman sees copper price “breakout,” risk of “extreme scarcity episode”
Right Arrow Icon