Analysts have predicted that copper prices could stabilize in future quarters despite a recent surge in value to pre-pandemic levels. Three month copper futures on the London Metal Exchange rebounded past the $6,000 dollar threshold by the end of June.
This recovery was influenced by several factors including the pace of China’s economic recovery, rising demand for renewable energy and electric vehicles as well as financial stimulus measures from global central banks such as the US Federal Reserve and the People’s Bank of China.
Another factor influencing the quick recovery in prices is the disruption to copper scrap trading. Copper scrap trading was particularly affected by the COVID-19 crisis which has led to a shortage of scrap metal.
As a result. China increased its imports of copper cathode to make up for the shortfall However, it is likely that recovery in the scrap market will lead to reduced demand for cathode which may have a stabilizing effect on copper prices.