Copper prices are usually regarded as a barometer of the global economy and a weather vane for the global mining market. The rebound in China's economic growth and the signs of progress in the research and development of the new crown pneumonia vaccine have boosted the demand outlook for industrial metals.

　　 Saxo Bank’s head of commodity strategy, Ole Hansen, told Reuters that the overall performance of industrial metals was strong this week, and the vaccine news boosted hopes for economic recovery in regions outside of China, where demand is already quite strong.

Peter Mooses, senior market strategist at RJO Futures, told Bloomberg, “The good news in metals is fermenting, and the price of copper is accumulating upward momentum. Base metal prices have been driven by the good news of economic recovery, and vaccines are the biggest benefit, which is the global recovery The long-term solution to concerns of further disruption."

　　 Goldman Sachs also expressed optimism about copper and other bulk mineral products. Goldman Sachs stated that based on cyclical and structural support, as well as continuous supply problems, copper is still Goldman's "most favored" commodity. The agency maintained its recommendation of "over-provisioning" commodities in 2021, on the grounds that this sector may be the best option for hedging inflation and is about to usher in another bull market. Goldman Sachs also said that compared to oil, base metals are more likely to rise in the short term because of the recovery in demand from China.

　　 Judging from the current situation, the global mining market is picking up significantly, and the prices of metals such as iron, copper, aluminum, nickel, and zinc have exceeded the levels before the epidemic. It is foreseeable that once the vaccine is widely deployed, the global mining market will be very exciting.

The report released by the World Metal Statistics Bureau shows that the global copper market has a short supply of 447,000 tons from January to August 2020, while last year's copper supply shortage was 383,000 tons.

Copper is one of the minerals with the most obvious separation of supply and demand. Although the demand is mainly in China, six of the world's top ten copper mines are located in Peru and Chile. South America is the world's largest copper supply base. At present, South American copper production is facing severe challenges, which is very worrying.

　　 Chile is the world’s largest copper producer. According to reports, the Chilean Copper Commission (Cochilco) is concerned that if new projects and mine expansion plans cannot be advanced as scheduled, the country’s copper production will face severe challenges. Jorge Cantallopts, director of the Research and Public Policy Department of the Chilean Copper Commission, said, “Chile currently has a large number of projects that can increase annual copper production to more than 6 million tons, or even 7 million tons. This is just potential. The question is how to achieve this goal."

　　 Cantaloptz believes that Chile should create conditions to accelerate the project, promote the sustainable development of copper mining, and extend the industrial chain. The Chilean Copper Commission expects copper production to decrease by no more than 100,000 tons. "If there is a second wave of epidemics, the situation will change. It depends on how large-scale the vaccine is." Cantaloptz added. In addition, the uncertainty of the Chilean Constitution has cast a shadow over the future development of the copper project, because before the introduction of the new constitution, investors will be cautious and will not rush to proceed with the project.

　　Peru is the world’s second largest copper producer. Compared to Chile, Peru’s situation is obviously worse. Recently, Lima, the capital of Peru, witnessed the biggest protest in decades. The political chaos caused the Peruvian currency exchange rate to fall to a historical low. Experts also warned that further turmoil will threaten the country’s efforts to fight the epidemic. Peru has one of the highest per capita death rates from COVID-19 in the world.

　　 The Bank of Montreal Capital Markets stated in a report that if the unrest in Peru escalates, it may cause problems with the logistics of copper concentrates (and other metals). Edward Meir, an analyst at ED&F Man Capital, told Bloomberg, “As the number of new cases increases, we have to expect further restrictions to be introduced soon. The spread of the epidemic may trigger people to be called again for mining activities. The fear of suspension has exacerbated this supply premium."

　　Although the new crown pneumonia vaccine has made progress, the number of people infected with new crown pneumonia is still increasing rapidly around the world, especially in South America. The situation is still very severe. In general, the shortage of international copper supply may intensify in the short to medium term, and the continued recovery on the demand side will provide strong support to copper prices.