Copper prices may rise by 75% in the next two years

Vietstock – Copper prices may rise by 75% in the next 2 years

Copper prices are expected to rise by more than 75% in the next two years due to strong demand for copper due to the shift to green energy.

A report from Fitch Solutions Research Agency BMI (HM: ) shows that the acceleration of the green energy transition has led to a sharp increase in copper demand. This is an essential source of metal for building engines using renewable materials. Therefore, the stronger the energy transition, the greater the demand for copper.

In addition, copper metal trading is mainly used for Dollar as a means of payment. The dollar is expected to continue falling as the Federal Reserve reverses policy in the second half of 2024, which could push the greenback higher.

Matty Zhao, head of Asia-Pacific Basic Materials at Bank of America Securities, said copper prices depend largely on macroeconomic factors.

Therefore, the possibility of interest rate cuts by the Federal Reserve and a weaker dollar will support copper prices.

Mr. Zhao also pointed out that at the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28) held not long ago, more than 60 countries agreed to support plans to triple global renewable energy power generation capacity by 2030.

Citibank economists said the move “will be hugely positive for copper prices.”

Citibank predicted in a December 2023 report that setting higher renewable energy targets would increase copper demand by about 4.2 million tons by 2030.

This could push copper prices to $15,000/ton in 2025, well above the historical peak of $10,730/ton in March 2023, the report added.

While demand for copper continues to increase, mining of this vital metal is actually being disrupted globally.

In November 2023, First Quantum Mining announced that it would stop production at the Panama Copper Mine, one of the world’s largest copper mines, after facing an adverse ruling by the Panama Supreme Court and nationwide protests related to environmental pollution issues.

Another major mining company, Anglo American, said it would cut copper production in 2024 and 2025 to reduce costs.

Goldman Sachs (NYSE: ) forecasts a copper supply gap of approximately 500,000 tons in 2024. Goldman Sachs analysts commented in a November 2023 report: “Supply cuts reinforce our view that the copper market is entering a more definite tightening cycle.”

Goldman Sachs expects copper prices to reach $10,000/ton this year and possibly $15,000/ton by 2025.

Astronomy (according to CNBC)