According to a report by BNAmericas, last week international copper prices approached US$11,000 per tonne (nearly US$5 per pound) for the first time in history, having risen by about 20% since the beginning of the year. Driven jointly by tight supply and growing medium- to long-term demand in the global electric vehicle market, copper prices could continue to reach new highs in the future.
　　As this metal becomes a commodity attracting intense investor attention, the continuously rising copper price could also reshape the market, introducing uncertainty for electric vehicle manufacturers and renewable energy producers.
　　Diego Mora, Head of Latin American Research at broker XTB, believes that “there is uncertainty regarding future copper market supply, and at the same time, copper inventories at exchanges remain high, indicating that demand remains limited.”
　　Although Mora believes that speculative factors are behind the rise in copper prices on the New York Mercantile Exchange, the London Metal Exchange, and the Shanghai Futures Exchange, “the long-term trend suggests that, driven by new technologies and demand for electric vehicles, copper prices could even double again.”
　　In response, Andrés González, head of the research department at Chilean consulting firm Plusmining, said that persistently high prices could lead to increased substitution or reduced copper consumption in electric vehicles.
　　Andrés Rioseco, Head of Marketing at Mesadinero, believes that although lithium prices have fallen from US$80,000 per ton in December 2022 to US$15,000 per ton, international copper prices could fluctuate between US$4.5 and US$5.0 per pound by the end of June.
　　Rioseco believes that in April, speculative participants such as commodity trading advisory firms and hedge funds bought copper futures. Coupled with weak Chinese demand and rising LME inventories, this led to a decline in trading volumes of futures contracts on both the London Metal Exchange and the New York Mercantile Exchange, reflecting that the rise in copper prices was “driven by speculative funds rather than actual purchasing demand from copper consumers.”
　　The reduction in production at smelters in the world’s largest copper-consuming and processing country is also a contributing factor. A sharp decline in copper-processing fees has prompted smelters to cut production by 5-10%, and the resulting decrease in refined copper supply is putting additional pressure on copper prices.
　　González revealed that since the end of 2023, copper inventories at the London Metal Exchange have fallen by 34%, while inventories at the New York Mercantile Exchange have remained stable, and those at the Shanghai Futures Exchange have reached new highs in recent years.
　　He added, “Due to the lack of new large-scale projects, replenishing inventories is being constrained by declining output from operating copper smelters.”