According to a report by Bloomberg News on May 20th, the price of copper has soared to its highest level ever, continuing a months-long rally. Driving this surge is a flood of financial investors into the market due to predictions that the supply shortage will intensify.

On that day, the copper futures on the London Metal Exchange rose by more than 4%. The price of copper broke through $11,000 per ton for the first time, but it gave back some of the gains in afternoon trading.

For months, banks, mining companies, and investment funds have been touting the bright long-term prospects of copper. In the past few weeks, a significant amount of investment has poured into the market.

Several developments in 2024 have emboldened those bullish on copper, attracting an increasing amount of speculative capital. Rumors are rife that the tight supply of copper ore is causing smelters to cut production. Investors predict that the surge in copper usage in rapidly growing sectors such as electric vehicles, renewable energy, and artificial intelligence will offset the drag caused by traditional industries like construction.

The copper price began to rise in early April. Last week, a short squeeze on the New York futures market triggered a global rush to buy copper, sending the price into overdrive.

Investors, traders, and mining executives have been warning for years that the world will face a severe copper shortage as demand in the green industry soars.

However, many participants in physical trading warn that the price of copper is "outrunning" reality. Demand remains relatively lukewarm—especially in China, the largest buyer, where inventory levels are still high, and suppliers of copper wire and rods have been cutting production.

Since the beginning of this year, the price of copper has risen by more than a quarter, leading the way in the overall rise of all major industrial metals. Like copper, the price of gold has also risen to record levels. Both metals are supported by optimistic views that the Federal Reserve will begin cutting interest rates this year.