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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