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HomeEconomyCOPPER SHORTAGE: One Of The Most Sought After Minerals Getting Scarce

COPPER SHORTAGE: One Of The Most Sought After Minerals Getting Scarce

Over the last several years, many analysts and mining experts have been forecasting a copper deficit as a result of the “energy transition.” The world’s largest economies have committed to reducing carbon emissions by cutting their reliance on fossil fuels. They are building solar panels, wind turbines and electric vehicles (EVs) with the aim of making renewables the primary source of energy. All of these ambitions, however, require significant volumes of copper, a metal whose electric conductivity makes it indispensable in producing green technologies, NEO reports.

Copper demand has come under pressure in 2022 amid political tensions, an economic slowdown in the US and Europe, and coronavirus lockdowns in China. The red metal now trades at about $8,300 per tonne, having declined in price more than 20% from this year’s peak in March. Still, the copper industry’s foundation remained solid – demand is set to rise in the mid-term, while supply may fail to catch up quickly. Goldman Sachs analysts expect the price of copper to reach $11,000 per tonne by the end of 2023.

Glencore, one of the world’s largest copper producers, has previously beensceptical about developing large greenfield projects, which may easily go over budget. Another concern has been that new mines may substantially increase copper supply, potentially having an adverse effect on prices. Ultimately, for a trader the price is often more important than volumes.

Credit: MSN.COM

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