If Copper is the go- to Metal in a clean Energy World, Why is its price stagnant?

Copper has been a major and popular commodity as the world transitions to clean energy and electric vehicles. Yet with all the copper demand data and the lack of supply alternatives, it's surprising that the price of copper has remained muted this year, trading near $8,500 a tonne, almost unchanged for the year and despite its importance in the transition to a low-carbon economy copper prices have been relatively stagnant in recent years, hovering around $3 per pound. As the world prepares for a recessionary environment, demand is currently not as strong.

There are several reasons for this stagnation. There has been an oversupply of copper in the market due to increased production from major copper-producing countries such as Chile and Peru, as well as increased recycling efforts. This increased supply led to a decrease in demand, which kept prices relatively stable.

The global economic slowdown caused by the COVID-19 pandemic has also had an impact on copper prices. As economic activity slowed, demand for copper also decreased, due to an anticipated demand slump especially from China as a result of the coronavirus outbreak. However, as the world begins to recover from the pandemic and economic activity picks up, demand for copper is likely to increase, which could lead to higher prices.

Third,?there?are?concerns?about?the?impact?of?the?transition?to?a?clean?energy?world?on?copper?prices.?While?the?demand?for?copper?is expected?to?increase?with?the?widespread?use?of?renewable?energy,?there?are?also?concerns?that?the?transition?to?more?energy-efficient technologies?could?reduce?copper?demand?in?some?regions.?For?example,?electric?cars?use?less?copper?than?hybrid?cars,?and?advances?in electrical technology?can?reduce?the?need?for?copper?in?the?energy-saving?grid.

The price of copper is largely influenced by the health of the Global economy. Oversupply, reduced demand due to the pandemic and uncertainty about the impact of the transition to a low-carbon economy play a major role in price stagnation. However, as the world recovers from the pandemic and demand for copper increases, it is possible that copper prices may rise in the future.