After touching a record high in early May of$10,460/tonne, copper prices largely fluctuated above$9,000/tonne. In the view of economists at ING, copper prices could slip moderately in 2022 but the stage is set for above long-term average prices over the next few years.

A delicate balance for copper

“Supply chain bottlenecks with their effects on copper supply to the China market may not go away easily in 2022, especially given the spread of the Omicron variant.”

“The tailwinds from the macro front could turn into some headwinds as we move into 2022, which could take some wind out of copper’s sails. This would include a stronger dollar and higher real rate along the US Federal Reserve's tightening cycle.”

“The low visible inventories may shield it from sharp price correction. While we anticipate that prices will slip moderately in 2022 from highs this year, the supply constraints over the long term and its appeal to investors as a key green metal are setting the stage for above long-term average prices over the next few years.”