November 28, 2022

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Important signal?  Something alarming is happening with regard to copper prices

Important signal? Something alarming is happening with regard to copper prices

Expect, among other things according to Goldman Sachs analysts, a shortage in the copper market is expected to lead to a sharp rise in prices and hamper economic growth. It will also have a positive impact on copper producer stocks. One of the largest companies in the world is the Polish state-owned KGHM.

However, it is now a song from the future. KGHM shares are fallingWith the decline in copper prices in the world markets. The market reflects current concerns. Once we look forward a little, we see a world that needs a lot of copper John Laforge, an expert from Wells Fargo, told Bloomberg.

Copper Market – Experts estimate that it will be close to it

The copper mine does not run overnight. This is a process that takes about 10 years. Meanwhile, Freeport-McMoRan, the world’s second largest producer, issued a statement that current prices are too low to economically justify new investments.

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Today’s low prices, combined with likely increased demand tomorrow, is a combination that, in the opinion of experts, could cause a real copper crisis.

There is about 30 kg of copper in the average car, and 200 kg in the average single-family home. As an excellent conductor, copper is also essential for energy transmission. Electric vehicles alone use twice as much copper as internal combustion vehicles.

  • S&P Global estimates that by 2035 global copper demand will double to 50 million tons per year.
  • Goldman Sachs calculates that in order to cover the 8 million tons production shortfall, it would require $150 billion in investment over a decade.
  • Bloomberg says the shortfall will be 14 million tons by 2040, with recycling the only solution.
  • For comparison, as noted by Bloomberg, this deficit in 2021 amounted to less than 0.5 million tons, causing copper prices to rise by about 25 percent.
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