Copper has been predicted to hit $15,000 per tonne by analysts at Goldman Sachs, up from its current level of around $9,700, as demand soars and supply fails to catch up, with the metal reaching a 10-year high on 26 April.

In a report titled ‘Copper is the new oil’, the Goldman analysts say there is ‘no decarbonization without copper’ and add that they expect demand to increase by up to 900% to 8.7 million tons by 2030 if there is widespread use of renewable energy and electric vehicles.

The report says: ‘Discussions of peak oil demand overlook the fact that without a surge in the use of copper and other key metals, the substitution of renewables for oil will not happen’, with copper critical for a wide range of renewable energy infrastructure including solar panels and wind turbines.

However, the analysts add that not enough attention has been given to this on the supply side, meaning there are likely to be capacity constraints in the coming years, noting that the copper price has risen 80% in the past year but that there hasn’t been a matching rise in production output.

Goldman earned some credibility in the commodity markets in the late noughties when it was the first to predict that oil prices would hit $100 per barrel.

Copper has already been expected to do well ahead of the reopening thanks to its status as a bellwether metal for the global economy due to its wide range of uses.

Concerns about supplies from Chile – one of the world’s top producers and home to FTSE 100 pure play copper miner Antofagasta (ANTO) – as well as sliding inventories, a lower dollar and expectations of stronger demand from top consumer China all triggered recent buying by commodities traders.

Also helping sentiment has been US president Joe Biden’s $2 trillion infrastructure plan, in which renewables are set to play a big part. Copper is seen as so important to the plan billionaire miner Robert Friedland, who owns mining giant Ivanhoe Mines, told a copper conference earlier this month that finding enough of the metal could become a national security issue in the US.

The 10-year high helped push Antofagasta’s share price up almost 4% at the start of the week, while an exchange-traded fund which tracks the copper price, WisdomTree Commodity Securities ETC (COPA), gained around 2%.

Antofagasta’s shares are close to trebling since hitting a low after the market sell-off last March and have more than doubled compared to their pre-pandemic level. The WisdomTree copper ETF has also doubled since its March 2020 lows and is also significantly above its pre-pandemic level.

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