Copper – prices have broken through a key technical level to 10,236/t
• The positive move in copper overnight suggests the metal may now rise towards $15,000/t according to one Commodity Trading Advisor • Copper prices must rally 50% for supply to meet demand according to Ivan Glasenberg, ceo at Glencore according to a report in the FT today. • Prices had been held back by comments from a Chinese official indicating that China might move to limit commodity prices if they raise inflation. • We suspect if China was to impose such draconian price limits it would have already done so in iron ore which we feel is more critical to the Chinese economy than any single base metal. • China is also seen as well prepared with substantial State Reserve Bureau reserves which can be made available to local manufacturers in the event of shortages. • The IEA warned earlier this week that high prices and availability could delay the transition to clean energy given the demands for batteries, wind turbines and solar panels. • Rising costs at the more marginal copper producers will require higher prices to meet rising demand for the new energy revolution as inflation eats into margins. • Copper prices were also helped higher by issues in Chile and Peru which might serve to reduce new investment into copper mining in these regions. • Demand is being driven by Stimulus measures encouraging the development of new wind and solar farms in the US, UK and China • Global copper demand from wind, solar, EVs and battery technology alone is expected to grow by nearly 600% by 2030 to 5.4mt per year. • Standard EVs contain approx. 1km of copper wiring- translating to 60-83kg of copper per car. ICE vehicle requires 15-20kg. • Level 1&2 EV AC charging points will contain 1-7kg of copper, while fast DC chargers contain up to 25kg. • Offshore wind requires 13.5t of copper per MW vs 4t of copper per MW for onshore turbines. • Solar capacity requires an estimated 4.6t of copper per MW. • China unwrought copper imports rose 9.9% YTD by the end of April to 1.92mt. • China copper ore and concentrate imports rose 4.4% YTD by the end of April to 7.88mt.