Will Copper be the new Oil?
“*Move over, oil. Copper will soon be the most important commodity in the world, says Nicholas Snowdon, commodities strategist in Goldman Sachs Research. *
*On an episode of the Exchanges at Goldman Sachs podcast, Snowdon argues that because it is “the most cost-effective conductive metal [for] capturing, storing [and] transporting electricity,” copper will be the key metal in the transition to a green economy. *
*He also estimates its price will soar from about $10,000 a ton today to about $15,000 by 2024. Why? Because the copper industry isn’t ready for the coming spike in demand. *
*“There’s no real investment in new mine projects and so, essentially, the copper market is sleepwalking into a really sizeable supply crunch akin to what we saw in the oil market back in the 2000s,” Snowdon says. *
*Ultimately, it will take “incredibly high” copper prices to encourage new investments. “Until there’s a really sharp increase in mine investment and capex goes back to the levels that we saw in the late 2000s—and we’re only about half of that currently—I think we’re a long way from declaring ‘mission accomplished.’ *
And so, I think that’s really the key message: Year one of a multiyear bull market really lies ahead of us.””