Copper prices leapt to near four-year highs after a jump in China’s imports of the metal in November boosted expectations of stronger demand. In addition, the government has ordered its top copper producers to halt output to combat winter pollution.
HXL expects the price of copper to rise to $7,400 a ton in 2018 as the outlook for global growth improves and investors and miners look for potential new uses, including the use in electric cars.
Copper is up 10% this month and has gained 31% year-to-date on potential demand and supply disruptions in China as the government orders its top producers, Jiangxi Copper Co., to cut production to combat winter pollution thereby. This follows a similar directive to China’s second-largest smelter Tongling Nonferrous.
Into 2018, we expect the price of copper to increase as global demand outpaces supply, especially from China and from developing countries as they increase infrastructure spending to spur economic growth. We also see and increase demand from electric vehicle (EV) manufactures, as a substantial amount of copper is required in batteries and rotors used in electric motors. Investors should purchase copper futures to take advantage of rising future prices.