In an extremely bullish forecast of the future of the copper price, a leading metals trader has opined that the metal could reach a price of $12,000 per ton within 18 months.

This could be driven by the demand from new green initiatives, a welcome new driver of demand.

The Zambian economy is highly dependent on the price of the metal,  and this forecast bodes well amidst other more negative economic outlooks

According to a Bloomberg article, the bellwether material has already doubled since a nadir in March to reach a nine-year high, and is roughly 7% below the record of $10,190 set in 2011 as bets on an economic recovery and tighter supplies entice investors. But current prices would seem “far too low” if governments fulfill pledges for green infrastructure and electric-vehicle incentives, Concord Resources Ltd. said.

“People need to be aware of the potential for a changing paradigm in terms of pricing,” said Mark Hansen, chief executive officer of the trading house. “In copper, the market is not yet pricing in the addition of potentially millions of new tons of copper demand over the coming decade.”

If governments follow through with plans for greater electrification of economies, copper prices would need to climb to a level that prompts demand substitution and miners to invest in new production, according to Hansen.

“It simply doesn’t happen at $10,000,” he said. “I would predict that if all those circumstances come true, we really need to see $12,000 copper to bring the market into balance and properly incentivize new production.”

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