Copper prices slipped into 2023 as a result of rising coronavirus cases in China, fears of an impending global recession led by the Russian military operation in Ukraine, high energy prices, and rising inflation, weakening demand and pressuring the world’s top consumer of industrial metals to tighten control measures that will disrupt supply and demand and impact the global economy.

“With Chinese stimulus starting to falter and COVID-19 resurgences triggering the possibility of more disruption, particularly across Asia,” analysts Eric Nguyen and Pranay Pathak said. “This volatility will only be exacerbated given the large amount of money flowing into commodity ETFs,” which has added around 1 billion pounds ($1.36 billion) a week during the past two months.

Analysts have said that the recent spate of positive case releases and signs that the economy is stabilizing have led to a “somewhat optimistic” outlook for copper. However, they warned that recent reports suggesting increased restrictions on logistics and travel within China could lead to further disruptions in supply chains. Following a two-year shutdown, the country is set to reopen on January 8, removing the required inbound quarantine for foreign travelers ahead of the upcoming Lunar New Year holiday.

Despite the year-end focus on First Quantum Minerals and the Panamanian government’s tax dispute, as well as a ransomware attack on Vancouver-based Copper Mountain Mining Corp after it announced the sale of its Australian exploration project, demand for energy transition commodities remains stable.

The market’s focus on near-term economic forecasts indicates a possible rebound in the midterm of 2023. The long-term outlook for copper remains strong as the world continues to shift towards greener and more sustainable energy sources.