Copper price: on the road to recovery

London Metal Exchange or LME copper prices are falling as of July 2022 at 7,040USD per Ton and the reason for this is the Coronavirus (COVID-19) lockdown which significantly slowed down the entire world’s economic growth. It is often used in power and construction, this makes copper essential for economic expansion.

However, these two greatly affected industries during the global crisis that we are currently facing. Since 2011, this is one of the biggest quarterly falls which was almost down to 20%. Copper has always been a leading indicator of the economic health of a country since it is used in many sectors. Even if copper prices fell for an amount of time, according to Daniel Homes of ANZ, improvement is actually pretty visible in China’s demand for copper which is a great sign for a recovering economy.

“In fact, it’s the exact opposite — we’re actually seeing signs in China of that demand picture improving,” he said. Investors are still investing on power and infrastructure developments despite the downfall that we have experienced because of the pandemic. Copper’s standing on the market is relatively promising as of today.

China and Copper

Of course, the copper market’s performance still depends on a lot of factors such as how global sentiment changes as the U.S. Federal Reserve hikes interest rates. However, supply issues will most likely help boost the demand for Copper in the next six to 12 months. In coordination with the attempt to revive the economy, Chinese President Xi Jinping declared the construction of infrastructure in April as well as the investment fund. China ruled out all possible circumstances; they knew that the possible high demand for metals could be well-handled by inventories. However, the rest of the world may have a hard time keeping up with demand still in mind.

With these efforts to help the economy, China also suggested banks extend loans to qualified real estate projects while still meeting the developers’ financing needs in order to continue their projects for unfinished infrastructures such as houses.

The fear of aggravating a real-estate crisis has definitely put a threat to the home buyers from all over China, which resulted in them stopping making mortgage payments for stalled property projects.

Copper in the Medical field

It is well-known that copper can destroy certain bacteria and viruses. In accordance with the COVID-19 Pandemic, Ames National Laboratory of the US DOE (Department of Energy), Iowa State University and the University at Buffalo have joined forces into making a Copper Nanowire Spray that makes any surface antimicrobial.

There are two varieties for this said spray: the first one uses pure copper nanowire while the second one uses copper-zinc nanowire. Both of which have been tested in the laboratory and inactivated the virus for less than 10 minutes.

However, of course, there are cons to using this nanowire spray which is why it is not yet launched for public use. Nanoparticles can dissolve and eventually become toxic, which is not great for the overall well-being of a human being and the environment. They are currently still doing some tests, lab work and researching further to make it safe for human interaction without harming healthy cells. They are also trying to study the use of iron oxide in eliminating cancer cells that have been existing in the global health problem for centuries and decades. The continuous development of technology helps in creating possible solutions for long-existing problems such as cancer and COVID-19.

2022 Predictions

According to the Goldman Sachs Group Inc., copper may eventually trade for 6,700 USD per ton in the next three months. This means around 22% of the downfall from the previous 7,040USD per ton. Even after these heavy losses, copper is still expected to rebound in a couple of months.

Copper prices are expected to rise by the end of 2022 at an average of 9,570 USD per Ton, 9,580 USD per Ton by 2023, and 10,400 USD per Ton by 2026. It is definitely not the time to give up on copper prices.

Latest updates on the Copper industry

Last July 20, a sinkhole was discovered near the site of Miners Ojos del Salado copper mine, according to Chile’s National Service of Geology and Mining. The good news is that no one was injured in the said incident. No people, equipment or even facilities were affected, but work was suspended for precautionary measures. It is a good thing that there were no casualties, but the fear of this happening in a much more populated area cannot be removed from the residents and government officials.

Sinkholes may appear because of different reasons, but the very common one is an underground cave system collapsing; the ceiling might have caved in. On the other hand, some nearby residents believe that the copper mine was actually a factor in this collapse but there is no study yet that has proven this accusation. The National Service of Geology and Mining of Chile is still investigating this incident. If ever they’ll be able to prove that the mining site actually has something to do with the sinkhole, then they will be punished accordingly.

On the other hand, nearly half a billion dollars worth of copper went missing in China. It is common knowledge that China holds one-third of the copper concentrate in the world. A group of Chinese companies are currently investigating the loss of 200,000 tons of concentrate because, according to them, they have only received about 100,000 tons at the depot. The said value for this loss is about 490,000 USD.

They often buy from larger counterparts in terms of materials, but there has been a lapse in their recent transaction. This said, the incident is definitely a risk for the entire copper market. Private investors may eventually pull out of contracts for fear of losing their money’s worth. Other traders have actually decided to re-route their cargoes that were due to arrive at the Qinhuangdao site, which was the hub that received the 100,000 tons of concentrate.