The rapid surge in copper prices, reaching nearly $10,000 per ton—a two-year high—may have come to a halt as buyers push back against further increases. Optimistic investors anticipating a seamless rise to record highs might face delays.
Recent changes indicate that manufacturers, key consumers of copper, may be cutting back on their purchases due to the current high prices.
Limit Reached on Copper Demand
Its prices have been rising due to increased demand spurred by the revival of global manufacturing. The price per pound has surged from $2.41 two years ago to $4.43 today, marking an 83.8% increase during this period.
However, Gu Yan, director of copper at Citic Metal Co., observes that “Demand from fabricators is very weak after the recent rally.”
Manufacturers—who convert copper into pipes, wire spools, and other industrial materials—are pushing back against the rising costs. They are struggling to pass these price hikes on to their customers, which may limit copper demand.
China is the world’s dominant force in copper consumption. Another challenge for further commodity price increases is China’s apparent reluctance to purchase more of it.
Chinese manufacturers are setting strict limits on their copper expenditures, indicating that demand might have temporarily peaked. This scenario puts a cap on price growth.
Copper Bulls Confront Reality
Stock market investors who gain exposure to copper through mining companies are becoming aware that the bull market may be coming to an end.
The three copper producers discussed below were chosen because they are among the largest in the industry.First is Freeport-McMoRan , a leading producer of copper, gold, and molybdenum.
Next is Southern Copper Corporation, the world’s fourth-largest copper producer, recognized for its commitment to sustainable mining practices.
Lastly, there’s BHP Group, an Australian-based diversified mining company that extracts copper, iron ore, metallurgical coal, and petroleum from its global operations.
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