Why is copper more expensive than ever?
The price of copper reached a new all-time high this autumn. On 7 September a tonne of copper on the London Metal Exchange cost more than 14,500 dollars for the first time. Later in September the price rose even above 14,800 dollars per tonne. Also on the exchange in New York copper reached a record price in the same period.
Copper is one of the most important metals in the modern economy. It conducts electricity and heat very well, so cables, motors, pipes and electronic devices are made from it. Electric cars contain several times more copper than ordinary cars. Wind turbines, solar power plants and power grids for transmitting electricity also use a lot of copper. Recently demand has been growing also because of new data centres for artificial intelligence, which use huge amounts of electricity.
On the other hand, production cannot keep up with the growth in demand around the world. Many mines are old, and opening a new mine takes more than ten years. In the past year there were serious problems at large mines in Indonesia and in the DR Congo. Because of this about 600,000 tonnes of copper disappear from the market every year. Analysts believe that production from mines this year may decline for the first time since 2017.
The price is being pushed up also by the plans of the USA for tariffs on copper. The US Department of Commerce proposed a tariff of 15 per cent from January 2027. From 2028 the tariff would rise to 30 per cent. The final decision will be made by the president of the USA, who still has not commented. Therefore American companies are importing large quantities of copper in advance, so stocks in the USA are growing, while on the London exchange they are falling.
High prices are good news for the big mining companies. The mining giants Rio Tinto, BHP and Glencore have already reported big profits from copper. However, for buyers more expensive copper means more expensive cables, devices and building materials too.
In Macedonia copper comes from the mine at Bučim near Radoviš, in the eastern part of the country. For the mine and for Macedonian exports, high prices mean higher revenues.