The copper price rose on Wednesday as worries eased about economic growth in top metals consumer China.
“The focus in China is moving away from worries about the property sector slowdown to increased signs that they are going to provide stimulus and support to the economy, some of which will benefit industrial metals,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
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March delivery contracts were exchanging hands for $4.58 a pound ($10,076 a tonne) on the Comex market in New York, up 3.4% compared to Tuesday’s closing.
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Copper for energy transition
“Commodities prices may stay high for decades as mining companies struggle to keep up with demand from the energy transition,” BlackRock Inc. global head of thematic and sector-based investing Evy Hambro told Bloomberg TV.
Raw materials, and shares of some companies that produce them, hit record highs last year as massive global stimulus measures underpinned consumption. At the same time, the switch toward a greener world is creating fresh demand for metals such as copper, lithium and nickel.
“That trend’s unlikely to change anytime soon,” said Hambro.
Goldman Sachs Group Inc., which last week said that a commodities supercycle has the potential to last for a decade. While infrastructure spending will require large amounts of materials like steel and cement, the green revolution will also need more metals including cobalt and nickel for products like batteries.
“Copper is such a strategic metal” and it “without a doubt” faces supply challenges in the coming years, Barrick Gold Corp. CEO Mark Bristow said on a panel in Saudi Arabia.
“There’s been too little investment in the red metal and that’s already a problem for the sector as consumption rises,”
“We’re in for a long solid market demand for metals,” he said.
Related Article: Nickel price storms to 10-year peak on worries about supplies
(With files from Bloomberg)