Copper three-month contract prices fell to USD$7,540/t last week, the lowest level since November 2020. Despite copper’s essential role in future energy transition, current headwinds continue to point to falling prices.

A strengthening dollar, along with continued COVID disruption and uncertainty impacting the outlook for China demand, has resulted in a sustained fall in copper prices over the past 90 days. Fears over a looming recession and continued high inflation mean that any recovery is unlikely in the short term.

Copper is an essential material for energy transition underpinning the roll-out of expanded electricity networks as well as electric vehicles and new renewable energy installations. Similarly, investments in the supply of critical materials for energy transition growth markets are essential to ensure progress is not limited by the scarcity of their future availability.

Project Blue’s monthly Critical Materials Basket Price Index tracks the prices of 30 critical materials and currently shows that June prices have declined by 11% from March highs. While the 12-month trend shows prices remain 30% higher than they were this time last year, another 90 days of price contraction would reset annual gains and arguably reset short-to-medium term expectations for a prolonged commodity super cycle.