Global copper prices have reached a two-year record high in part thanks to the speedy recovery of China's economy in the post pandemic era. Industry analysts suggested that China's expanding power and construction sectors will continue to support copper demand and become the main driver of global copper consumption growth.
London Metal Exchange copper futures hit an intraday high of $6,877 per ton as of Monday, and COMEX copper futures hit an intraday high of $3.12 per pound, both hitting their highest levels since late June 2018.
Meanwhile, Shanghai copper futures ended at 52,160 yuan ($7,704) per ton, up more than 47 percent from the year's low in late March.
Global demand for copper is recovering quicker than previously expected. "This is thanks to healthy consumption in China due to an economic stimulus package and demand from the construction industry, as well as improving market sentiment," major global credit rating agency Fitch Ratings said in a recent statement.
The statement echoed the opinions of industry experts who believe that China's demand for copper remains strong and will continue to increase in the post COVID-19 era as the economic resumption is underway.
"China is a major importer of copper and China's copper gap is large, with domestic production unable to meet the needs of the country's modern development," Zhou Shijian, former vice president of China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters, told the Global Times on Tuesday, noting that around 80 percent of the copper used in China each year is currently imported from overseas countries such as Chile.
During its development and construction, China has a great demand for high-voltage lines every year, among which the demand for copper is very high.
"The entire southeast coast of China consumes a lot of electricity. We generate electricity from coal from places like Northwest China's Shaanxi Province and then send it to the southeast coast via UHV electricity transmission, which obviously requires a lot of copper to be conducted," said Zhou.
Wang Zhongkui, vice president of the tin industry branch of the China Nonferrous Metals Industry Association, also agreed that China's demand for copper may partially contribute to world copper prices.
However, both experts noted that China's demand is not the only reason for the rise in prices, as other factors - such as continuous virus outbreaks in copper producing countries - and the disruption of logistics could also be the cause.
China has seen a gradual resumption in demand as construction has gotten underway after the virus was contained, with imports of copper ore and its concentrate increasing from January to July in 2020, China Customs statistics showed.
