Copper prices are soaring, how high can copper prices fly in 2021?

A major metal trader said that due to the new demand brought about by environmental protection measures, copper prices may break the record within 18 months and rise to $12,000 per ton. This is one of the most optimistic forecasts for copper prices so far.

Since bottoming in March this year, the price of gold has doubled to a 9-year high, which is about 7% lower than the historical high of $10,190 set in 2011, due to investors' bets and supply of economic recovery Tension attracted them. But Concord Resources Ltd. said that if the government fulfills its promise of green infrastructure and electric vehicle incentives, the current prices appear to be "too low."

"People need to be aware that the price model may change," said Mark Hansen, CEO of the trading company. "As far as copper is concerned, the market has not yet factored in the millions of tons of additional copper demand that may be added in the next 10 years in its pricing. "

Hansen said that if governments continue to implement economic electrification plans, copper prices will need to rise to a level, prompting demand substitution and miners to invest in new products.

"This simply cannot happen at $10,000," he said. "I predict that if all these things come true, we really need to see a copper price of $12,000 to balance the market and appropriately stimulate new production. "

Hansen said that aluminum may be one of the benefits of other metals, because manufacturers hope to replace them with cheaper materials as the price of copper rises. In addition, he also said that pressure to clean up carbon-intensive industries may result in restrictions on aluminum production in China.

Concord is one of several medium-sized metal traders competing with major traders such as Glencore Plc and Trafigura Group. The London-based company was profitable last year and delivered 3.9 million tons of raw materials to customers. Both Glencore and Trafigura have given optimistic views on the copper market, but neither company has made publicly as optimistic forecasts as Concord.

Hansen said that the main risk to his prospects is if the government fails to implement a green stimulus spending plan. He also warned that any weakness in the Chinese economy would cause metal prices to fall.

However, he believes that any decline is a buying opportunity, and pointed out that after China imported a large amount last year, the inventory was low.

"Inventories that should have been built up during a recession and then usually fall during an economic expansion do not exist. This is a very favorable factor."

In addition, some banks withdrew from commodity trade financing, restricting financing to producers, which may further support prices.

"The risk is that since commodities have been relatively undervalued assets for most of the past 10 years, those of us in the industry may not realize the scarcity value of some of these markets as demand dynamics change rapidly."