Updated February 13, 2020 09:42:16 The copper ore price is back to its historic lows.
But is that a good thing?
And how much does it matter?
That’s the question posed by the latest CNBC video from the company’s conference call with analysts.
The company said that “the price of copper ore, a key component of the copper grid, is set to rise by about 20 percent this year” in what will be the first time in nearly four years the price will surpass $3 per pound.
So is that good news for copper miners?
“The price of coal and natural gas, two of the two main sources of electricity, are also set to increase, but the impact of the dollar is muted in the short term,” the company wrote in a statement.
“The rebound in prices for coal and gas should be seen as a positive, but as a reminder, copper ore production in the U.S. is only about 1 percent of total U.A.E. coal production.”
It also noted that the price of nickel ore is expected to rise about $1.60 per pound, which is “a big boost” for nickel miners.
The silver and gold prices are expected to drop this year as well.
So what are the chances that the prices of those commodities will rebound?
“Our long-term forecast is for the gold and silver prices to fall by more than 10 percent in the first half of 2021 and 15 percent in 2021, but we expect the silver and silver ore prices to rise in the second half of the year, if not sooner,” the firm wrote.
“This is because silver and copper prices have been falling sharply in recent years and will continue to do so in the long term,” it added.
The price of aluminum ore will drop by about 25 percent in 2020, it said.
The copper price is expected be back to about $4.50 per pound in 2021 and up to $7.50 in 2021.
But that could change in the near future.
“While copper prices are still about 80 percent below their historical highs, the price is set for a rebound in 2021 as copper is seen as more competitive in the global copper market,” the analyst wrote.
The reason for the price decline in copper is largely down to supply and demand, said CNBC’s John Carney.
The U.K.’s copper mines are still producing, the company said, and the supply of copper has been falling due to the aging of its copper production plants.
And the demand for copper in China has been growing due to its rising industrial demand and a glut of copper in the country, he said.