Copper - simple supply and demand!Copper prices surged to all-time highs yesterday after the Chinese central bank kept its benchmark interest rate unchanged, signalling that the nation's demand for copper may increase even more. According to the International Copper Study Group, simple supply and demand is the primary reason for the close to 25 percent spike in copper's price this year. The study group claims that for the first eight months of the year, mine production increased a mere 1 percent year on year, while usage was up more that 8 percent. Should the strong demand trends continue, analysts argue that the price of copper will continue its record run.
Mining and metals consulting firm CRU estimates that China's copper consumption will almost double by the end of 2020, which would account for nearly 50 percent of world copper sales. With over 1.3 billion citizens, China needs loads of the red metal to meet its modernization requirements for electricity and infrastructure.
Gryphon