The global copper market is witnessing a significant increase in demand, primarily driven by its essential role in the transition to green energy. Copper’s applications in renewable energy technologies and electric vehicles have positioned it as a critical component in the global shift towards sustainable energy solutions.
Despite the rising demand, the copper market remains highly volatile. Factors such as extraction costs, taxation policies, and environmental concerns pose challenges to mining companies. For instance, Antofagasta, a prominent Chilean copper producer, reported an 11% increase in earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2024, reaching $3.4 billion. The company plans to invest significantly in expanding its processing capacity at the Centinela mine to reduce per-tonne costs and boost production in the coming years.
Industry experts highlight that while demand forecasts are robust, the supply side faces constraints. Chief Executive Iván Arriagada noted, “There is no wall of new supply on the horizon. A shift in the market balance is underway, one that will support pricing in the medium term.” This anticipated supply-demand imbalance suggests that copper prices may remain elevated, benefiting producers but also contributing to market unpredictability.
Investors are advised to approach the copper market with caution, considering the inherent volatility and external factors influencing both supply and demand dynamics.
Source: Financial Times
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