Alright, let's get real about copper, folks. Glencore's chase after Canada's Teck Resources has thrust copper into the limelight. Not just an economic cycle indicator, copper is destined to shine in the green transition, thanks to its key role in EVs and solar tech.
Here's the deal:
• The U.S. Inflation Reduction Act could turbocharge copper demand by offering tax credits for clean-energy projects.
• Goldman Sachs estimates an average annual demand boost of about 180,000 metric tons between 2023 and 2030. That's massive!
• Despite this, investment plans might not be up to snuff. McKinsey predicts global copper demand to hit 36.6 million metric tons by 2031, outstripping supply.
Political shenanigans aren't helping. Under the IRA, EVs must use batteries with "critical minerals" from the U.S. or U.S. free-trade partners. Copper isn't on the list, but there's growing support for its inclusion.
The goal? Pry control of clean power mineral supply chains from China. This could cause a price hike, but it might also stimulate investment. With possible changes to the IRA on the horizon, it's a bit of a wild ride. But if everything holds up, the world will be gunning for more copper to power up green economies. So, keep a keen eye on copper – it could be the next big thing.
[Original article by Megha Mandavia, published on (https://www.wsj.com/articles/the-next-big-bull-market-could-be-copper-a8390fd8?)]
