Outlook For Copper Prices – Up Or Down?

During the past several years — much to the delight of producing firms and countries — copper prices have surged from under $1 to more than $3/lb. Anyone familiar with the industry also knows that since the early 1970s the long-run trend in real copper prices has been significantly downward. This sharp contrast between short-run and long-run trends raises the issue of the forces behind these developments. What has been driving short-run prices up and long-run prices down? Simple economics suggests that it is all a matter of supply and demand. When demand is rising faster than supply, prices will rise and vice versa.