With the boom in electric cars, AI and the energy transition, the strategic importance of copper increases rapidly. Some experts even see the new “crude oil” in America.
• Key raw material: Meaning of copper in view
• Customs announcement drives high price
• Copper more important for the USA than oil?
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Copper outlook
The price of copper, often referred to as “Dr. Copper”, is considered a reliable indicator of the development of the global economy. Due to its high conductivity, durability and corrosion resistance, the industrial metal is essential for use in the construction industry, in electrical systems as well as in the production of electric vehicles and renewable energy technologies.
The global importance of copper results from several factors, as Capital summarizes: As a economic barometer, the copper price reflects the dynamics of infrastructure investments and industrial production. With the growing spread of electric vehicles – which require up to four times more copper than conventional cars – the demand for the metal rapidly increases. At the same time, the global offer comes under pressure: falling ore qualities and political uncertainties in important conveyor countries such as Chile and Peru make care difficult.
The worldwide expansion of renewable energies also increases the need for copper, since wind turbines and solar panels are dependent on the metal. At the same time, external factors such as monetary policy decisions of the US Federal Reserve and trade conflicts ensure considerable price fluctuations.
Despite short -term risks, however, the outlook remains positive. According to Reuters, Goldman Sachs predicts copper prices on London Metal Exchange of $ 9,600 (three months), $ 10,000 (six months) and $ 10,700 (twelve months) per ton. The bank assumes that new US tariffs could prevent an oversupply on the American market, but warns of a temporary drop in prices after the entry into force came into force in April.
“In view of the possibility of an earlier introduction of tariffs, we now expect that the US camp stocks will decrease by 30 to 40 kt/month from the middle to the end of the second quarter,” says the message. “This is how we avoid an oversupply of inventory in the United States in the third quarter of 2025 if we expect the greatest tension in the global copper market.”
In the long term, according to Capital, technological progress should continue to boost copper needs: according to that Raw material dealer Trafigura could increase the additional need due to artificial intelligence and data centers by 2030 by up to one million tons. After all, this growth could also further exacerbate the existing supply bottlenecks and focus even more on the strategic role of copper as a key raw material of the future.
Record high after customs announcement
The copper futures on New York Comex recently reached a new record high of over $ 5.37 per pound. According to Yahoo Finance, the reason for this was reports that the US government under Donald Trump could introduce copper in a few weeks – and thus much earlier than expected – on copper. The view of soon-to-be trading barriers led to a real rush for deliveries to the United States and further increased the price difference between the US and the international market.
As early as February, the White House had initiated an investigation into possible weaknesses in copper imports. According to a Bloomberg report, the tariffs could come into force in May, instead of forecast in autumn as it was from Wall Street.
Which is why copper could be more important for the United States than oil
Because of its importance, analysts now describe copper as the “new oil”: an indispensable raw material for technological transformation, but scarce in the USA, as Marketwatch explains.
“Copper is the new crude oil,” said Phil Flynn, senior market analyst of the Price Futures Group. It was “probably more important for the US economy than oil at the moment,” he added and called it the “new hottest raw material in the world”.
Data would show that domestic production has not been able to cover the need for years. Around four -four percent of the annual consumption of imports would come.
In view of this dependency, some experts criticize possible tariffs as contradictory: “I understand that some of our trading partners are sharply criticized for their insolent tariffs on US exports and that they threaten to do so or want to insert them to reduce their tariffs,” Peter Boockvar, Chief Investment Officer of the Bleakley Financial Group and Editor becomes of the Boock Report quoted. “What I do not understand is the survey of tariffs on an import product that we will not produce enough and never produce in the United States.”
Phil Flynn from Price Futures Group also assumes that copper prices could double within four years. The demand for copper will “experience growth, as we have never experienced since the end of the 1990s, when the Chinese economy came out of the doldrum”. While the market on possible tariffs as a trigger for the recent increase in copper prices indicate, however, the reality is that this is a “wake -up call for a market that will fundamentally be undersupplied if things did not change in a short time,” said Flynn and added, Trump’s “final destination” in terms of copper could “build something like a strategic reserve”. The ability to “have a reliable supply will be crucial to cover the enormous demand that we will experience in the next few years.” Trump’s measures showed that he wanted to “boost” domestic production not only from copper, but also from other important minerals, says Flynn.
Editor finance.net
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