Despite the hype and hope,…
Colombia’s already-struggling oil industry is…
Renewables—and especially offshore wind—are set to drive a surge in copper demand that will push prices even higher, as the amount of copper required per wind turbine is staggering, at 63,000 pounds.
A week ago, the basic metal surged to a record high because of supply chain disruptions. By the end of the week, however, it had cooled off on efforts by China to rein in the commodity market rally.
Now copper’s on the way up again, and this is likely to be a steady trend.
The reason for this is renewable energy—and more specifically wind energy—researcher Mirela Petkova wrote for Energy Monitor in a recent article. Offshore wind turbines require 8 literal tons of copper for every megawatt of generation capacity, Petkova noted, adding, citing data from the International Energy Agency, that “An average turbine of 3.6MW, which can power more than 3,300 average EU households, will contain close to 29 tonnes (t) of copper.”
This upward trend in demand for copper will only intensify in the coming years as the world expands its renewable power generation capacity. It is likely to be supported by the constant threat of a supply disruption like the one in Chile that spurred the latest reversal in copper’s fortunes.
After last week the rally among basic metals lost some steam because of China’s efforts in that direction, a wage dispute between BHP Group and workers at its remote operations center in Chile changed that. Bloomberg reported earlier today that 97 percent of the workers had decided to strike, which would mean a supply disruption that could last a while as the company negotiates with them in a round mediated by the Chilean government.
There is also a shortage of new supply coming in even as demand grows. According to Glencore’s Ivan Glasenberg, the tightness of supply is likely to continue until copper prices rose as much as 50 percent from current levels.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.