The World is Running into Severe Copper Deficit
Copper supply has become a national security issue.
That’s according to billionaire Robert Friedland, who once said, “You’re going to need a telescope to see copper prices in 2021.”
“In the short term, we’ve had a big rise in the price of copper,” he added, as quoted by Bloomberg. “But for the medium term, copper has really become a national security issue. It’s central for what we want to do with our economy.”
The situation has grown so dire, one of the world’s biggest copper traders, Trafigura Group believes the metal could hit $15,000 a ton over the next decade.
Goldman Sachs says it could rally to $10,500 over the next 12 months. Citi says it could reach $12,000 by 2022.
Adding to the supply problem, the global economy is waking back up again.
In 2020, the world pretty much shut down.
Copper miners were forced to drastically cut back on operations.
“What was supposed to be a year of mined supply growth turned out to be the second consecutive year of zero growth,” said Reuters. On top of that, the global economy shrank by the largest amount in 74 years to approx. 3.5% in 2020. Now, though, as the world gets back on its feet, the global economy is expected to grow about 5.5% this year, and another 4.2% in 2022, according to the International Monetary Fund.
The last time we saw growth like that was during the housing boom of 2003 to 2006, which sent the price of copper up about 376%.