New York, NY – Copper is quickly becoming the new essential industrial commodity, following in the footsteps of oil’s historic rise in previous decades, according to a top commodities analyst.
The surge in demand for copper is being driven by various factors in the economy, including the widespread adoption of artificial intelligence, the rapid expansion of data centers, and the growing emphasis on green energy solutions. Jeff Currie, chief strategy officer of Energy Pathways at Carlyle, highlighted the impact of these trends on the demand for copper, asserting that it is now the most compelling trade he has ever witnessed.
The versatility of copper in various industries, from manufacturing and construction to electronics and high-tech products, has long positioned it as a critical component of the global economy. However, the recent influx of investments in artificial intelligence and renewable energy has added a new dimension to the demand for copper, reshaping its outlook for the future.
Currie’s predictions for the future of copper prices include a potential spike to $15,000 per ton, driven by the current scarcity in supply. Bringing new copper mines online is a lengthy process, taking between 12 to 26 years, which further exacerbates the supply constraints.
The current record-high benchmark prices for copper in London, standing at approximately $10,000 per ton, have more than doubled since the lows of the pandemic in early 2020. Currie anticipates further price increases in the future, comparing the current bullish sentiment on copper to his optimism about oil prices in the 2000s, when crude prices soared from $20 to $140 per barrel.
Copper’s significance was underscored by BHP’s recent attempt to acquire Anglo American in a $40 billion deal that would establish the world’s premier copper producer. However, Anglo American rejected the offer, opting instead to restructure the group, with plans to divest its diamond business, De Beers.
As the demand for copper continues to climb, fueled by advancements in technology and the global shift towards sustainability, the future of this indispensable industrial commodity remains a topic of keen interest and speculation among investors and industry experts.