Recently, copper prices have seen a wave of downturn due to weak demand and over-supply on the global copper markets. Nevertheless, market intelligence firm Kpler senior commodity analyst Reid I'Anson believes that while short-term sales are inevitable, those who continue to invest in copper may be rewarded in the long run.

The imbalance in supply and demand has led to a fall in copper prices.

A few months before 2024, copper prices once jumped, but Reid I’Anson said the short-term outlook for copper remains weak.In addition to demand issues, over supply is also a major factor in the current decline in copper prices.

“The supply looks pretty strong right now. If you think about the balance of supply and demand, you’ll find that we’re over-demanding,” said Goldman Sachs analyst Adam Gillard, who also warned that the market situation is continuing to deteriorate and is currently a surplus market and the price of copper will fall in the short term.

Long-term investment still has potential

Although the retreat in copper prices is obvious in the short term, Reid I'Anson still expresses long-term optimism. He noted that the long-term development prospects of the electric vehicle and artificial intelligence industries will continue to drive the growth of copper demand.

“At the moment, these industries around electric vehicles and artificial intelligence are long-term industries... In the long run, we’re still looking up and we think copper looks like a good investment,” he said, adding that there’s still a lot of renewable energy construction in China that helps support copper demand.

Impact of the Electric Car Industry

Hallgarten’s mining strategist Christopher Ecclestone has a different view of the electric car industry. He believes that the electric car industry is used to sell stories about “winning rich in the future” and that current claims about copper shortages are just a myth that copper shortages may occur in the future, but not now.

“For investors, buying or not buying copper depends on the outlook for the global economic recovery... If you believe that future economic conditions will improve, the current price could be a good point of purchase,” Ecclestone said.

Forecasts of future copper demand

Despite the over-supply in the short-term copper market, most analysts still believe that copper shortages will be an objective fact.The uncertainty of the global economic recovery has increased the market's swing over the "copper shortages theory", but in the long run, copper demand will grow significantly.

Analysts expect the demand for copper to double from the current level to 50 million tons in order to the target of close to zero net emissions by 2035. Even with conservative estimates, demand will increase by at least one-third in the next decade, which will put pressure on the copper market in the short and long term.

Uncertainty in global markets

Uncertainty in the global markets has influenced the fluctuations in copper prices to a certain extent.While the current surplus supply has caused prices to fall, future demand growth is expected to make copper still seen as a raw material with long-term investment potential.

In summary, although copper prices decline in the short term due to excessive supply, in the long run, as the global transition to renewable energy and electric vehicles continues to grow, copper demand will continue to grow.Investors need to be cautious about short-term market volatility, but in the long run, the prospects for the copper market remain bright.