In 2023, the price of copper remained strong with an average annual price of
$3.85/lb, modestly down from 2022’s annual average of $3.99/lb.
After experiencing volatility in the previous year, copper prices traded in a relatively narrow range of $3.56/lb to $4.33/lb in 2023. High interest rates and economic concerns kept near-term prices rangebound despite rising demand and supply limitations.
Chinese demand
China’s GDP grew by 5.2% in 2023 after the country ended Covid-19 lockdown measures. China is by far the world’s largest consumer of copper and overall demand for the metal is significantly impacted by economic activity in the country. With the International Monetary Fund projecting China’s GDP to grow by an additional 4.6% in 2024, combined with low levels of global copper stockpiles and constrained mine supply due in part to production disruptions, there should be a corresponding positive impact on copper prices.
In the longer run, due to the critical role that copper will play in the energy transition, though the manufacture of electric vehicles, EV batteries, solar panels, wind turbines, and power grids, the outlook for copper demand in the coming years remains very positive.
Price volatility
Since the turn of the century, the market prices of both gold and copper have increased impacted by challenges facing the global economy. Copper prices have experienced greater volatility while gold prices showed more consistent strength. Over this period, increases in gold prices have exceeded the S&P 500 Total Return Index with copper prices keeping pace, demonstrating the long-term benefits of holding hard assets in an investment portfolio.