Why did copper prices suddenly skyrocket? What are the reasons?

Copper reserves in China are only 3%, but smelting accounts for about 40% of the world’s total. Therefore, China is currently the world’s largest producer, consumer, and importer of copper. However, copper prices have recently skyrocketed, so why has copper prices suddenly skyrocketed? What are the reasons? Why did copper prices suddenly skyrocket?
1. Economic recovery
The main reason for the significant increase in copper prices is due to economic recovery. Generally speaking, copper prices are positively correlated with economic cycles and are also known as barometers of the economy. During the period of rapid economic development, there was a strong demand for copper, and prices also skyrocketed; When the demand for copper decreases during an economic recession, copper prices will decrease.
2. High demand
Copper is difficult to increase in the short term. Last year, copper supply in Peru and Chile decreased due to supply issues. Their investment has been continuously declining since 2011, and new production capacity has not increased. These two countries are the largest producers of copper, but due to the pandemic not recovering, global demand for copper has increased, leading to an increase in its price.
3. US policy
From the perspective of liquidity, the United States has initiated quantitative easing monetary policy, causing the US dollar to fall and pushing up copper prices on the financial side.
What are the uses of copper?
1. Electricity industry
The application of copper in electricity includes power transmission such as cables, transformers, switches, copper bars, plug-in components, connection terminals, etc. In addition, it also includes motor manufacturing such as stators, rotors, shaft heads, and hollow wires. Communication cables and residential electrical lines also require a large amount of copper conductors.
2. The electronics industry
In the era of informatization, people are no longer able to leave electronic products, and the most basic circuit composition of electronic products is made up of copper. The proportion of copper in industry will further increase.
3. Energy and chemical industry
The application of copper in the energy industry mainly lies in heat dissipation and condensation, appearing in the form of copper pipes. Copper and many copper alloys in the petrochemical industry are mainly used to manufacture corrosive media in contact, such as various containers, pipeline systems, filters, pumps and valves, evaporators, heat exchangers, and condensers.
4. Transportation industry
Copper alloys in the shipbuilding industry include aluminum bronze, manganese bronze, aluminum brass, gun copper (tin zinc bronze), white copper, and nickel copper alloys (Monel alloy), all of which are standard materials for shipbuilding. Copper and copper alloys are generally used in military and commercial ships as aluminum bronze propellers, bolts, condenser tubes, rivets, and copper coated paints.
5. Electric vehicles
With the popularization of electric vehicles, the amount of copper used in charging stations and batteries has significantly increased.
The above is an introduction to the reasons for the sharp rise in copper prices. For hundreds of years, copper has been widely used and the demand is also very high. The main reasons for this rise in copper prices are as follows.