The price of copper has always been considered a reliable measure of economic health, as changes to copper prices can suggest global growth or an upcoming recession.
Copper prices normally have high volatility and strong liquidity, mainly getting affected by extraction and transportation costs, as well as supply and demand.
With the upcoming boom expected for clean energy, it would be imperative to remember that an electric car uses four times as much copper as a conventional car. As such, there are very few mines ready to go and the world is facing a copper shortage in the future.
China’s imports of copper concentrate from Australia had dried up completely in December, as smelters shunned Australian suppliers amid rising tensions between the two nations.
It marked the first time in more than 16 years that monthly imports have been at zero as a bilateral trade dispute slams China's demand for Australian supply of the commodity.
There had been media reports in November that said that the Chinese government had instructed companies not to purchase copper concentrate and at least six other commodities from Australia because of souring relations between the two countries.
The sanctions apparently brought to a standstill a trade valued at around $3.7 billion a year.
As a result of this unofficial ban, Exporters of Australian copper concentrate were left tracking other markets such as Japan, South Korea and Europe, with smelters, which use the material to make refined copper, hungry for extra feedstock in a tight market.
The impact of the unofficial ban appears to have been more than cushioned by robust copper prices and high demand from other markets amid supply concerns.
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