Underinvestment in copper over the past years caused supply issues. The prices have soared, and green initiatives have created a higher demand for metals.
In the past decade, many manufacturers in this market have become very conservative. This has led to insufficient investment to penetrate the supply chain, clearly creating problems now.
From electronic products to home construction, copper for manufacturing. The demand for the metal is an economic indicator. Earlier in 2021, copper prices hit their decade-highest level. So far this year, copper prices have increased approximately 21%.
Many such companies now realize that the price is growing, and they want to take advantage of it. However, the preparation time for the new mine to go online will take a considerable amount of time.
Looking ahead, the demand for copper will only pick up. I’Anson said that a critical factor is to promote sustainable development as the government invests more in green initiatives.
Chilean Instability Poses a Risk to Copper
I’Anson said that political instability in Chile would also cause this problem, which is where most of the world’s copper comes from.
Last month, the country’s ruling coalition unexpectedly failed to obtain the seats needed to draft a new constitution. Last year, Chileans voted to rewrite the country’s body after a massive protest against inequality in 2019.
They also have some uncertainty about COVID, making new investments slower than initially expected, say 6 to 12 months ago. Therefore, as a major copper producer, Chile is working hard to set a timetable for large-scale investments. That needs to be made to meet the already apparent supply shortage in this market.