Copper, the new oil of the 21st century

Copper, the new oil of the 21st century
Copper, the new oil of the 21st century

The American site Fortune » published a report on the future of copper on May 19, 2024, highlighting the impact of artificial intelligence and green energy on increasing its prices, with increased demand due to the use copper in data centers and renewable energy.

In this report, Jeff Currie, senior commodities analyst and director of strategy at EnergyPathway in Carlisle, says copper is poised to become the next must-have industrial commodity, harkening back to the rise of oil in decades past.

Read also: IACE: analysis of the rise in copper prices and its impact on the economy

According to Currie, new economic forces, including the emergence of artificial intelligence, the explosion of data centers, and the green energy revolution, are increasing demand for copper. The development of new weapons also contributes to this demand. “Copper is the new oil,” Currie said, adding that his discussions with traders confirm this trend, calling copper “the highest confidence trade I have ever seen.”

The site highlights that copper, a major industrial leader for a long time, is used in various fields ranging from manufacturing to electronics. Currie notes that massive investments in artificial intelligence and renewable energy are relatively new to copper forecasts, acknowledging he made a similar prediction in 2021 when he was an analyst at Goldman Sachs.

Currie is convinced that this time marks a take-off phase, with three sources of demand: artificial intelligence, green energy and the military, compared to just green energy three years ago. Despite high demand, supply remains limited as new copper mines could take between 12 and 26 years to become operational.

The analyst anticipates a price increase of up to $15,000 per tonne. Copper prices have already reached records in London, standing at around $10,000 per tonne…

In the same context, the American site “ Business Insider » reports Currie’s statements on copper supply issues, explaining that copper is going through an unprecedented imbalance between supply and demand. And he lists three reasons why this situation is not a “fashion”.

First, it highlights that low-income groups, the main consumers of goods, will benefit from a wealth redistribution policy favorable to materials like copper. Second, growing environmental policy has sparked an industry-wide race for copper, with the mineral playing a key role in creating green economies. Notably, the growth of green capital in China was more than 100% last year and 30% this year. Third, deglobalization, leading to increased military spending, strengthens the demand for copper.

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