Like many other English terms, the word "copper" comes from the Latin. The Romans called the metal "aes cyprium", which translates as "ore from Cyprus". This original term then became the word "cuprum", from which in turn we get "Cu" as the name of the element. People had discovered the usefulness of copper long before the Roman Empire, though. Objects made of bronze, a compound of copper and tin, were already being made more than 10,000 years before. Today the metal with the typical red lustre is more in demand than ever. Properties such as its outstanding electrical and thermal conductivity and particular resistance to corrosion make the industrial metal an indispensable raw material. "Without copper our modern life would not be possible," says Europe's largest copper producer, Aurubis. The range of applications extends from IT hardware through the supply of electricity and heating of buildings to vehicle manufacturing.
Demand has grown sharply as technology has progressed. In the 1980s global annual copper production came to some 9 million metric tons. Since then the market volume has almost tripled (see graph). It is China's economic rise that is primarily responsible for the fact that Asia now accounts for more than 70% of worldwide copper demand (see graph). The Middle Kingdom has also ensured that the downturn triggered by the coronavirus pandemic was unable to dampen the structural growth in demand. According to figures from the International Copper Study Group (ICSG), in 2020 global demand reached more than 25 million tons for the first time. This increase can be attributed solely and entirely to China, the largest purchaser of the industrial metal. Last year the leading emerging economy consumed 13% more copper. Without this effect worldwide demand would have shrunk by a tenth. Japan and the EU posted the sharpest falls, at 15% and 11% respectively.
Alongside the rapid economic recovery, the sharp drop in prices – the quotation collapsed by up to 23% in the first quarter of 2020 – must have persuaded Beijing to buy copper: according to the ICSG, last year China increased its imports by 38%. This move by the People's Republic ensured that the copper market was once again undersupplied, with supply lagging almost 600,000 tons behind demand. The interruptions to production caused by coronavirus also played a role in this deficit alongside China's hunger for raw materials. Many mines had to shut down in the first phase of the pandemic. According to ICSG figures, Peru was the hardest hit – copper production collapsed by 12.5% in the South American country in 2020. By contrast, mining in Chile recovered quickly, the world's largest copper producer seeing its output slip only 1% in the year as a whole.
Other regions have followed China in coming out of the economic "coronavirus slump". Against this background the price of copper has risen sharply over recent months. The next due future traded on the London Metal Exchange (LME) at the end of April passed the USD 10,000 mark for the first time in ten years. Taking a one-year view, that meant the contract had got over 90% more expensive. Many analysts are thus assuming a further rise in prices. Goldman Sachs recently attracted attention when a study by the US bank called copper the "new oil". In the view of the experts, the versatile metal will play a central role in the decarbonisation of the economy. This was particularly true for the generation, storage and distribution of renewable energy. Goldman Sachs is therefore anticipating a supply crisis and setting an offensive price target. In 2025 one ton of copper could cost USD 15,000 on the LME.
e=expected; source: International Copper Study Group Past performance is not a reliable indicator of future performance.
