The copper market is currently hotter than ever, mainly due to the sharply rising demand driven by megatrends such as electromobility and the energy transition. These developments are leading to a dramatic imbalance between supply and demand, creating a “ticking time bomb” for the market.
Reasons for the High Relevance of the Copper Market
- Growing Demand from E-Mobility: Copper is a critical metal for electric vehicles (EVs) as it is indispensable in batteries, electric motors, and charging infrastructure. The increasing prevalence of e-mobility significantly boosts the demand.
- Energy Transition: The expansion of renewable energy also requires large quantities of copper for power lines, transformers, and other components.
- Supply Shortages: Alongside the high demand, there are also supply issues. Shortages in natural gas and electricity threaten copper production, leading to production outages and disrupted supply chains.
- Physical Scarcity: Stock levels on the London Metal Exchange (LME) are plummeting, indicating physical scarcity.
Current Price Development and Forecasts
- The current copper price is around 8,613 USD per ton (as of September 2024).
- Analysts expect a further increase by August 2025 to approximately 10,050 USD per ton at the LME.
- In the long term, the copper price could rise to over 10 USD per pound in the baseline scenario by 2030 or even reach about 14 USD.
Opportunities for Investors
The combination of growing global demand due to technological megatrends and a tight supply creates an attractive situation for investors:
- Price Increases Provide Yield Opportunities: Rising prices mean potentially high profits for investors in copper or copper-related financial products.
- Long-Term Growth Potential: The fundamental trends suggest that the importance of copper will continue to increase.
Overall, this presents a “gold mine” for investors in the critical metal copper – however, they should also consider the risks of high volatility and geopolitical influences.