Copper stores haven’t been this low in 47 years, driving prices...

Copper stores haven’t been this low in 47 years, driving prices to record levels

Copper is back in vogue after ending months of malaise to return toward record price levels on Friday, rising above US$10,000/t for the first time since May.

The close of US$10,538/t on Friday arrived amid a supply crunch across the base metals complex sparked by power rationing in China and Europe that has seen a number of smelters curb production.

That is around US$4.78/lb, up to 3-4 times the all in sustaining costs of large miners who at these rates are making extremely healthy profit margins.

But many in the industry remain buoyant, noting the long-term outlook for copper remains strong because of fading supply from legacy mines, historic underinvestment in exploration and the need for the highly conductive copper to feed the transition from fossil fuels to renewable energy and electrification.

Glencore is bullish on the prospects we will continue to see records, predicting the price of copper will break the previously unseen US$15,000/t barrier this decade.

“I think everyone realises that the demand side is looking very bright over the next decade for EV minerals and particularly copper, which really has leverage to just about every technology and every renewable energy technology or new batteries technology out there,” .

As the world’s leading refined metals experts and traders came together for the annual LME Week last week, stocks of the red metal on the London Metals Exchange sunk to their lowest since 1974.

While BHP (ASX:BHP) and Rio Tinto (ASX:RIO) have always been into copper (they co-own the giant Escondida mine in Chile among others) each have made it a more prominent part of their exploration and development portfolios in recent years.

Rio is set to open the new Winu mine in WA’s Paterson province around 2025, while BHP has a new discovery near its world class Olympic Dam copper-gold-uranium mine in Oak Dam in South Australia.

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