Copper-trading centre in Abu Dhabi planned by UAE’s IRH

Oriental Image via Reuters Connect

• Copper vital to energy transition
• UAE and Saudi push to secure supplies
• China uses 57% of world’s copper

The UAE’s International Resources Holding (IRH) intends to set up a copper trading hub in Abu Dhabi, as the market looks to forecasts from China on the direction of prices.

IRH, an arm of International Holding Company, said it plans to target “over 500,000 tonnes of green copper annually by 2025”.

“This initiative will further cement the region’s strategic importance in the global energy transition,” the company was quoted in a Reuters report as saying.

At market close on Thursday, shares in International Holding Company were trading at AED402, 0.5 percent down.

The company has said it is seeking to expand in copper mining after buying a 51 percent stake in Mopani Copper Mines in Zambia in a $1.1 billion deal.

The Zambia mine purchase and the planned trading hub are two parts of a wider push in the UAE and Saudi Arabia to secure critical metal supplies in Africa and Latin America.

IRH also announced on Wednesday the first sale of lithium concentrate from the Canada-based company Sigma Lithium to Abu Dhabi, which will receive 22,000 tonnes.

Copper is key to the energy transition and demand for it is thus expected to grow significantly in the coming decades. S&P Global expects copper demand in 2035 to be 20 percent higher.

The price of copper has fluctuated significantly in 2024. In May, prices spiked to their highest level since the Covid-19 pandemic, reaching highs of $11,104.5 a tonne. LME Copper is currently trading at around $9,500 a tonne.

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Eleni Joannides, research director in the UK for copper at the research and consultancy firm Wood Mackenzie, said the spike and readjustment were signs that the market “ran well ahead of the fundamentals.”

What China does next is critical for the market, because the country accounts for 57 percent of global copper consumption.

“I would expect any further announcements by China to have an influence on the copper price in the coming year as well,” Joannides said.

Copper prices are now trading at around $1,000 per tonne above levels at the start of the year, which Joannides said was “not materially higher”.

Robert Edwards, principal copper analyst at the business intelligence company CRU, said: “The run-up in the copper price to over $10,000 per tonne through mid-late May was driven by a perceived supply shortage and a constructive demand outlook, with a lot of hype around potential copper use in data centres and AI.”

Edwards said he expected demand to be influenced by the Chinese market and interest rate cuts in the US,. For 2025, he expects just a slight price increase, despite global growth in demand.

He forecast that demand and supply were balancing, and “we expect to just exceed $10,000 per tonne on average in 2025.”