Tunis: The Tunisian economy, like other economies in the region, will be affected by the rising prices of imported materials that rely on copper as a raw material or as part of their composition, predicts the Arab Institute of Business Managers (IACE).
In a ‘Reading of Rising Metal Prices’, the institute said that the decline in copper production and rising prices will affect the global and Arab economies as it is widely used in power generation and the manufacture of cables, solar panels, wind turbines, electrical equipment, factories, electronics and construction.
This increase will in turn drive investors to safe havens such as gold and silver, while the instability of copper prices could pose a major challenge to the global and Arab economies, given its widespread use in many industries and its impact on interest rates and inflation.
Unlike gold and silver, the dynamics of copper prices are closely linked to industrial demand and economic conditions, with the price of copper rising from $3,802/lb2 at t
he beginning of 2024 to around $4,676 on April 29, 2024.
According to the Institute, this price increase is due to several factors, the most important of which are the increase in manufacturing activity around the world leading to higher demand, the imposition of new sanctions on Russian mineral exports and the decline in global mine production, particularly in Chile, the world’s largest copper producer. Chile’s production reached around 5 million tonnes in 2023, down from 5.2 million tonnes in 2022, accounting for around 24% of total global production, according to IACE.
China, as the largest supplier of copper, also influences market prices, as it imported $50 billion worth of copper in 2022, of which about 31 per cent came from Chile.
Gold and silver: Safe Havens
The price of gold has risen by around 14.5 per cent since the beginning of the year amid heightened geopolitical tensions in the Middle East, as the price of gold reached $2336 (around 7340 dinars) per ounce on April 29, up from around $2040 (
around 6418 dinars) per ounce at the start of the year.
Rising demand for gold has also had an impact on gold prices, as central banks around the world have maintained their year-on-year purchases of gold to combat high inflation over the past two years, according to the World Gold Council.
The World Gold Council reported that the net gold reserves held by central banks in the first three months of this year were nearly 36,000 tonnes.
Economists and analysts expect gold prices to exceed $2,500 an ounce in the coming period if demand continues and geopolitical risks do not abate.
These tensions were also reflected in silver prices, which reached $27.24 per ounce, up from $23.20 at the start of the year.
English: Samir Ben Romdhane
Source: Agence Tunis Afrique Presse