Global Economic Recovery Boosts Copper and Iron Ore Prices

Copper and iron ore prices hit all-time highs on Friday. World hopes for a global economic recovery which increases demands for raw materials.

Spot iron ore surpassed US$200 per ton for the first time. In London on Friday, Copper, which is the global economic health leader, exceeded US$10,200 per ton. It was a 1.4% rise to an all-time high of US$10,232.

China’s Strong Trade Data overnight also contributed to the rise of copper and iron. As the United States recovered from the coronavirus pandemic and stimulated demand, China’s exports surged last month.

Exports increased by more than 32% year on year, reaching nearly 264 billion U.S. dollars, mainly driven by the demand for PPE and other medical-related products. Imports also jumped, rising 43.1% from the same period last year to US$221.1 billion, higher than the 38.1% increase in March.

In the broader commodity sector, aluminum prices also expanded their gains on Friday. Palm oil hit a 13-year high, and steel also hit a record high.

In the recent rebound, supply issues have also played a role, with some copper mines in South America shutting down. Australia’s iron ore weather was also bad. China is currently looking for iron ore supplies elsewhere (mainly in Africa).

Steel producers have adopted various restrictive measures to reduce carbon emissions and curb supply. However, they keep their annual output above one billion tons. These measures have increased steel prices and the profitability of steel mills. It allows the company to absorb higher iron ore costs better.

On Thursday, Ivan Glasenber that copper needs to jump another 50% to have enough supply to go online.

Decarbonization trends in many countries-including switching to electric vehicles, expanding wind and solar energy-might also increase the demand for metals.