Copper is the new Gold!

The price of copper has fallen a third time since march and is expected to stunt the demand for copper used in almost every electronic circuit. Yet commodity experts believe that the increasing demand for copper will create a giant hole in the developing energy and communication sectors.

The concerns are that if the world is going to turn electric, it is going to need a lot of copper. Hence to satisfy that level of demand could stop global growth, hype up inflation and most importantly, extinguish any hope of completing climate goals.

Reasons: It takes at least 10 years to develop a new mine and get it running, which means that the decisions producers are making today will help determine supplies for at least a decade. Mine supply growth will peak by around 2024, with a heap of new projects at work and as existing sources dry up. That’s setting up a scenario where the world could see a historic deficit of as much as 10 million tons in 2035.



Effects: As the world goes electric, net-zero emission goals will double the demand for the metal to 50 million metric tons annually by 2035. Goldman Sachs forecasts that the benchmark London Metal Exchange price will almost double to an annual average of $15,000 a ton in 2025 (Double the current price). But if the Chinese economy is to shrink, there is a huge chance of the demand getting fulfilled. 

What's in it for you: If you are a big industrialist, the long terms goals to be added to your list would definitely contain having multiple partners who supply you copper (the same strategy was used by NVIDIA for having a constant supply). If you are a private investor, you could look into investing in copper as a commodity, or copper mining giants for stocks and futures.

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