Copper Demand In China Remains Strong
China is the world’s second largest economy. On top of that, the country is the leader when it comes to the consumption of raw materials like copper. As a result, demand for the metal in the country will either help to support price increases or add resistance to the price of the metal.
Recently, data came out of China with regard to copper imports in the month of June. In the month, we saw slight easing in demand for the commodity out of the country. In fact, this is the third month of copper demand declines we’ve seen consecutively. Nonetheless, demand is still up 22% through the first half of the year, with monthly copper demand out of China being around 2.74 million tonnes. In a staement, Helen Lau of Argonaut Securities in Hong Kong had the following to say…
“If you look at investment in power and the property sector, the numbers are all good. Except for air conditioner production which is in the negative zone, demand is pretty good… Given China imported a lot of concentrates, it has a lot of refined copper production and it’s still able to accept such relatively solid imports, that reflects relatively good and improving demand.”
Green Energy Also Helps To Support Growth In Copper
Another factor that’s helping to lift the value of copper is the change we’re seeing in the energy sector. All around the world, consumers, businesses, and even governments are working toward creating a more green environment. The goal here is to reduce reliance on the burning of fossil fuels.
To do so, we have to see a shift in energy creation to more green options. So naturally, we’re starting to see more and more solar power plants being built, we’ve also seen several wind power farms and hydro-power installations.
This creates further demand for copper. At the end of the day, copper is an incredibly important commodity for the energy sector. After all, the commodity is the strongest known conductor of electricity. So, it is used to transfer electricity from solar panels to cells and from these cells to the end consumer. As we continue to see a shift in how the world looks at electricity, we’re likely to continue seeing increased demand for copper from the industry.
What We Can Expect To See Moving Forward
Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from the price of copper. The reality is that everything seems to be lining up perfectly for the commodity. As demand from the energy sector continues to rise, and China’s economy continues to work toward improvement, we’re likely to see copper prices skyrocket.