IGI Logo

Key Highlights

* Copper futures on the MCX surged to a record high of Rs.972.55, marking a new milestone.

* Commodity cycles unfold in three phases: energy first, then precious metals, followed by base metals.

* Energy prices spiked post-COVID, with crude reaching $113 and natural gas testing $10.

* Precious metals doubled since August 2022, with gold, silver, and platinum leading the rally.

* Base metals are now expected to gain 20–25% over the next two years, led by copper and zinc.

Copper futures touched a historic peak of Rs.972.55 on the Multi Commodity Exchange (MCX), signaling the onset of a new and crucial phase in the global commodity cycle. The rally is being seen as part of a broader market trend that has unfolded sequentially across asset classes over the past several years.

Commodity specialists point to a three-stage pattern that typically governs how cycles reactivate after major economic shocks. The first phase centers on energy. In the wake of the COVID-19 pandemic, crude oil prices spiked to $113 per barrel, while natural gas tested $10. This surge reflected heightened demand recovery, supply dislocations, and inflationary pressures rippling across global markets.

The second phase has played out in the precious metals sector. Since August 2022, gold, silver, and platinum have all witnessed substantial appreciation, with prices in many cases doubling. Safe-haven demand, coupled with persistent inflationary concerns, pushed investors toward these metals, reinforcing their role as defensive assets during times of economic uncertainty.

Now, the third and slowest-responding phase of the commodity cycle appears to be underway, led by base metals. Copper’s new all-time high is widely interpreted as the opening chapter of this stage. Analysts suggest that copper, zinc, aluminum, and lead are set for sustained upward momentum over the next two years, underpinned by both cyclical recovery and structural demand.

“Today’s breakout in copper is only the beginning,” said Kedia Advisory. “The next two years will likely see 20–25% gains across the base metal complex. Copper and zinc are expected to lead this move, with aluminum and lead gradually participating in the rally.”

Copper holds a unique position within the group. Often referred to as “Dr. Copper” for its ability to reflect global economic health, the metal is also central to long-term structural shifts such as electrification and renewable energy infrastructure. Demand from electric vehicle production, power grids, and industrial expansion further strengthens its outlook.

Zinc, meanwhile, is expected to follow closely, supported by its extensive use in galvanization and infrastructure development. Aluminum and lead, while slower to respond, are also projected to benefit as industrial activity broadens and supply chains adjust to rising consumption needs.

The record-setting price comes against a backdrop of optimism that industrial metals, which lagged behind energy and precious metals in the earlier phases of the cycle, are now poised to deliver strong returns. Unlike the speculative surges seen in gold and silver, base metal rallies are often grounded in fundamental industrial demand, making them particularly significant for long-term investors.

The unfolding cycle suggests that commodities remain firmly in focus for investors navigating a volatile macroeconomic environment. If historical patterns hold true, the current rally in copper may be a harbinger of broader gains across the base metals sector, with copper emerging as the standout performer of this phase.

Above views are of the author and not of the website kindly read disclaimer