Copper price

Copper is the most widely used raw material among industrial metals. About 50% of global copper consumption goes to China, where construction, power grids and electric-vehicle (EV) manufacturing are the main end-users. An electric car contains about 80 kg of copper, compared with roughly 20 kg in an internal-combustion car. The energy transition — EV adoption, renewable power and grid expansion — is a durable source of demand. Market jargon calls copper "Dr. Copper" because its price is one of the better gauges of the global industrial cycle.

On the supply side, Chilean and Peruvian mining dominate. Chile produces about 5.5 million tonnes a year, led by Codelco and BHP's Escondida. Peru produces about 2.4 million tonnes. Global mine output is roughly 22 million tonnes a year. Ore grades at major operating mines continue to decline. Average copper content has fallen below 0.5%, compared with more than 1% decades ago. That means more rock, more energy and higher unit costs for the same amount of metal, which structurally lifts the cost base.

In the short term, inventory levels move the price. Weekly warehouse data from the London Metal Exchange (LME), the Shanghai Futures Exchange (SHFE) and COMEX give a direct read on market tightness. Low inventories and strong Chinese demand data usually support prices. High warehouse stocks and weak manufacturing PMI readings tend to weigh on the market. The dollar and global real interest rates also affect copper, although less than they affect gold.