What is driving the copper price?

COMMODITIES

Catherine Raw, co-manager of the BlackRock World Mining fund, explains why, despite a volatile ride, copper prices are likely to be higher in the next 10 years than they were over the last decade.

Copper, often seen as a bellwether for the health of the industrial economy, has had a volatile ride over the last six months. The price fell more than 26% during September and October 2011, only to recover the majority of these losses by early February 2012. Despite this volatility, we feel that the long-term prospects for the red metal and the share prices of copper producers are strong, due to long-term demand and supply forces that should keep prices high and profit margins wide. Copper is subject to three issues that are constraining supply growth. Firstly, mines are struggling t...