Mining Analyst - Stefan Ioannou: Exploring the Investment Potential of Copper Amid Supply and Demand Imbalances

October 11, 2023

Investing in Copper Stocks

In the world of investments, some of the most promising opportunities often stem from supply and demand imbalances. One prime example of this is the current state of the copper market. Copper, a key commodity, has captured significant attention, especially from a medium to long-term perspective.

The driving force behind this interest is the inevitable shift toward electric vehicles (EVs). While not everyone might own one immediately, it's widely anticipated that the car of the future will be electric. Copper plays a vital role in this transformation, not in the batteries themselves, but in the power infrastructure required for charging these vehicles. Moreover, the green energy revolution, encompassing wind and solar power, also relies heavily on copper to transmit the generated electricity.

Copper's demand has been steadily increasing over time, and now, there's a new layer of demand emerging over the next 5 to 10 years. This surge in demand is poised to significantly boost global copper consumption. However, when we consider the supply side of the equation, a significant issue arises. There's an insufficient number of mines to meet this rising demand, which is creating a potential supply deficit.

While this supply shortage might not be good news for copper as a metal, it's incredibly promising for the copper price. In essence, the scarcity of supply is likely to drive the value of copper higher, making it an intriguing investment opportunity for those who want to capitalize on the growing demand for this essential metal in the coming years.

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