COPPER (LME) Copper, the most critical metal

Originally posted by Clark888 ↑

I thought this Wood Mac 'Champagne supercycle on horizon' article might be of interest. Access it via the Tweet below:

Extracts from Wood Mac report
"Another commodities supercycle is on the horizon, but it will be different from any that have come before, Wood Mackenzie asserts in its latest report.

For the first time in the mining industry’s history, a paradigm shift in demand has been clearly signposted before it materialises.

But this time, as the saying goes, it’s different. While previous cycles lavished windfalls on the entire natural resource sector, the forces shaping this nascent boom are unlike any other. For the first time hydrocarbons will be bystanders, while those metals critical to the energy transition will take centre stage with a sustained period of extraordinary demand growth.

The winning commodities from the energy transition are a set of industrial metals that will electrify society: copper, cobalt, nickel, lithium and aluminium.

Simply put, without a huge increase in the supply of the mined commodities used to create renewable energy, transmit electricity or build enabling technologies, there is currently no way to meet the world’s carbon-reduction targets."

For the 'Cliff Notes' version of this Wood Mac report, please see the article via the following Tweet:

Note: the current copper price cycle has been called a 'supercycle' by Goldman Sachs, with it forecasting a copper price target of US$15,000/tonne (US$6.80/lb) for the year 2025.

Cheers

These are only my thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.

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"Another commodities supercycle is on the horizon, but it will be different from any that have come before, Wood Mackenzie asserts in its latest report."

Alex Tsukernik (President/CEO at Nova Royalty) is the first person I have seen distill the above point into one simple slide. It is not a temporary trend. Hopefully you will have the same epiphany I did.

Alex (see post #54024962) says what distinguishes the 4th Industrial Revolution is that it represents the first globally coordinated effort to change the way the world powers the economy. It is a strategic effort driven by economic and social factors.

Economic factors include the push by governments, corporations and investors for the electrification of transport and decarbonisation of energy sources. The main social factor is the world's urgency to reach 'Net-Zero by 2050' sustainably.

The preceding three Industrial Revolutions conversely were uncoordinated, regional energy policy driven principally by economic factors: cost, efficiency, and availability. More importantly, they happened in each country, at different times, across multiple decades.

Why this time it really will be different for copper:
(a) this is coordinated worldwide energy demand. Critically, it is also happening all at the same time;

(b) unlike the previous 'supercycle' which depended on China, this structural copper bull market will be driven by spending by: the USA, the UK, the EU, India and Asia (China, Japan, South Korea).

The copper project pipeline is already well behind where it needs to be for an electrified/ decarbonised world.

Currently, there is no consensus on how this much copper will be produced, in such a relatively short period of time, to meet the demand in the medium-term and longer-term sustainably.

Cheers

These are only my thoughts and it does not constitute investment advice. Before acting on any information you read and before making any financial or investment decisions, you should always consult your advisor(s) or other relevant professional experts.