Then why has copper prices soared wildly recently?
The recent rise in copper prices has had many effects, but overall there are two major reasons. First, confidence in global economic growth is restored, and everyone is bullish on copper prices. In 2020, due to the impact of the new coronavirus epidemic, the global economic situation is not very optimistic, and the GDP of many countries has fallen by more than 5%. However, recently, with the release of the global new coronavirus vaccine, everyone’s confidence in the control of the new coronavirus epidemic in the future has increased, and everyone’s confidence in the recovery of the global economy has also increased. For example, according to the forecast of the International Monetary Fund, it is expected In 2021, the global economic growth rate will reach about 5.5%. If the global economy is expected to be ideal for a period of time in the future, then the global demand for various raw materials will further increase. As the raw material for many products, the current market demand is relatively large, such as some electrical and electronic products we currently use, Machinery and precision instruments are likely to use copper, so copper is closely related to many industries. In this case, copper prices have become the focus of market attention. Therefore, many companies may worry about future copper prices and purchase in advance. Into the copper material.Therefore, with the overall rebound in market demand, the gradual rise in copper prices is also in the market’s expectations.
Second, the hype of capital. Although the demand for copper prices in the market has risen recently, and it is expected that future market demand may increase further, in the short term, copper prices have risen so quickly, I think it is not only caused by market demand, but also driven by capital. In fact, since March 2020, not only the raw material market, but also the stock market and other capital markets have been affected by capital. Because the global currency will be relatively loose throughout 2020. When the market has more funds, there is no place to spend. Money is invested in these capital markets to play capital games. In the capital games, as long as someone continues to take orders, the price can continue to rise, so that capital can get huge profits without any effort. In the process of this round of copper price increases, capital also played a very important role. This can be seen from the gap between the futures copper price and the current copper price.Moreover, the concept of these capital speculations is very low, and some of them are not involved, especially the spread of public health incidents, vaccine issues, and natural disasters have become excuses for these capitals to speculate on copper mines.
But on the whole, it is expected that the global copper mine supply and demand will be in balance and surplus in 2021. For example, according to the data predicted by the International Copper Research Group (ICSG) in October 2020, it is expected that the global copper mine and refined copper will be in 2021. The output will increase to 21.15 million tons and 24.81 million tons respectively. The corresponding demand for refined copper in 2021 will also increase to about 24.8 million tons, but there will be a surplus of about 70,000 tons of refined copper in the market.
In addition, although some copper mines are indeed affected by the epidemic and their output has decreased, some of the copper mines that have reduced production will be offset by the newly commissioned copper mine projects and the increased output of the original copper mines.
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