The Biden Administration’s decision to ban Russian oil.
China’s slowing economy and decreasing demand for construction.
Ongoing labor disputes at a Peruvian refinery.
Combine all three, and you have a situation where copper prices bounced from record highs to levels near where they were before the Russian conflict in Ukraine.
Taking your back to the first few days of the Russian invasion, copper prices responded almost immediately by jumping nearly 50 cents a pound over the week from February 28 until March 4.
The copper price reached a record high on Monday, March 7 as President Biden debated a ban on Russian oil in the United States. The price reached $5.03 a pound before dropping 30 cents to close the day at$4.73.
Many speculated that the loss of Russian oil would speed up the need for clean energy opportunities in the United States, which would require a strong demand for copper.
The price continued to drop for more than a week as news out of China indicated a downturn in not only the economy but in demand for copper. China consumes more than half of the world’s copper supply. As a result, the price of copper dropped for three straight sessions, before finally settling at $4.51 a pound on March 15.
But the price jumped 20 cents in two days following news of more supply concerns from Peru. Protestors closed the country’s largest mines. On March 16, mine owners announced it will be closed for the next 15 days while the protest continues.
This week analysts are saying while the price may continue to be unstable, they expect the price to stay slightly below $5 a pound for the rest of this year. If the conflict in Ukraine remains, and the demand for clean energy in the U.S. grows, analysts believe the price will be significantly higher than $5 a pound in 2023.
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