idnplaysicbo| Copper supply is limited this year, and prices may continue to rise!
Huitong Financial App News-the global copper market is tightening, market analyst Frank Holmes said on May 6. Production aspectIdnplaysicboChallenges, such as the shutdown of major South American producers and declining ore grades, are expected to limit supply growth this year, although a rebound is expected in 2025.
Despite these challenges, demand for copper continues to grow because of its key role in green energy solutions. The International Copper Association (ICA) predicts that copper demand will increase from 28.3 million tons in 2020 to 40.9 million tons by 2040, with a compound annual growth rate of 1.Idnplaysicbo.85%.
Global manufacturing provides further insights. JPMorgan's global manufacturing purchasing managers' index (PMI) fell slightly to 50.3 in April from a 20-month high of 50.6 in March, but remained above neutral, suggesting the sector is expanding. This resilience in manufacturing suggests continued demand for industrial metals, strengthening the bullish outlook for copper.
The rise in manufacturing input costs and sales prices suggests that price pressures are building, which could exacerbate inflation fears. Investors must take these economic indicators into account when assessing the potential impact on commodity prices and investment returns.
The transition to a low-carbon economy is not only a policy preference, but also a potential investment theme. According to foreign media and financial reports, the global investment in energy transformation reached an astonishing US $1.8 trillion in 2023, almost double that of 2020. Given the important role of copper in electrification and renewable energy infrastructure, these investments, particularly in regions such as Europe, the Middle East and Africa (EMEA), are expected to drive further demand for copper.
Frank Holmes, a market analyst, said the copper industry was showing convincing growth against the backdrop of global economic recovery and the transition to green energy. With the expected increase in demand and current supply constraints, prices are likely to continue to rise, providing valuable opportunities for investors.
LME copper daily chart
