With a copper deficit of 10 million tonnes (nearly one-third of current global demand) forecast by 2040, UK construction and manufacturing sectors are set to face an immense period of volatility as demand begins to outpace supply. Metal prices remain high, and copper in particular is reaching new records. For businesses trading in metals, the current question is not whether prices will rise (or fall), but how quickly and by how much.
Citi predicts that copper prices could reach £15,000 per tonne by Q2 2026. For those who planned their annual budgets last April, this could have serious implications for the business’ bottom line, but how were CFOs to predict this without a crystal ball?
The one thing we can be certain of is that in the current geopolitical ecosystem, uncertainty is here to stay.
It’s not about trying to play the market, but the CFOs who adopt their planning approach to a proactive one that is data-led are going to see the dividends later down the line.
Why are copper prices so high?
The current copper boom is twofold, as a result of a boom in Artificial Intelligence infrastructure and a greater demand for electric energy. Modern AI data centres require three to five times more copper than traditional facilities, with a single 100-megawatt site consuming tonnes by the thousands.
What’s more, Asia alone is expected to account for 60% of demand growth before 2040, driven by factors including a swift adoption of electric vehicles and upgrading the power grid to increase capacity. So far, copper has been the electronic accelerator, but is it soon to become its limiting factor?
This is all coming at a time when supply is naturally waning. Many copper mines will soon be less productive due to their age and will need a great deal of investment to reboost productivity.
What’s the solution to rising metal prices?
UK business confidence is on the decline, and it’s no surprise when decision makers feel they are dealing with one price swing after the next. But what if you could be sure that the prices you were forecasting would be the very same when it comes to actually buying materials?
Buying as you go throughout the year leaves your cash flow vulnerable to fluctuating costs, but using financial structures such as forward contracts allows you to lock in the price you will be paying, allowing CFOs to make informed decisions and plan with certainty.
Tools like this were previously reserved for the big conglomerates and multinationals of the world, but modern tech solutions are making it possible for businesses of all sizes to implement simple strategies that will get them ahead in the game.
Taking control
In a world where copper prices can swing in a single day, the ability to lock in certainty has never been more valuable.
The volatility isn’t going away, but your exposure to it can be managed.
For companies ready to move from reactive to strategic procurement, commodity hedging offers a clear path forward. This way, planning replaces guesswork, and certainty becomes your competitive advantage. Explore our tools and see how hedging can benefit your business today.
