Running on Empty: Copper

Summary

The price of copper has reached new record highs due to supply constraints. And while the Energy Information Agency expects global copper production to reach an all time high later this decade, they also warn that by 2035 the world will be in a whopping 10 million ton shortfall. Australian mining giant BHP also estimates that the world will produce 15% less copper in 2035 than it does today, as copper discoveries grind to a screeching halt and existing mines deplete. The signs of an imminent peak and decline in copper production could not be any clearer.Thank you for reading The Honest Sorcerer. If you value this article or any others please share and consider a subscription, or perhaps buying a virtual coffee. At the same time allow me to express my eternal gratitude to those who already support my work — without you this site could not exist.The price of copper has reached new record highs this weak, exceeding $11,600 per ton on the London Metal Exchange (LME) on Friday. Ostensibly this was due to a large withdrawal of the metal from LME warehouses earlier this week, but if you look at the long term trend, there is clearly much more at play here. The price of copper is trending upwards for decades now. Global financial giant UBS has just raised its price forecasts aggressively, predicting that copper will cost $13,000 per ton by December 2026. What is going on here?Simply put, we are on a collision course between tightening global copper supply and demand fueled by electrification and most recently: AI data centers. Copper is an essential component in everything electric due to it’s high heat and electrical conductivity, surpassed only by silver. Copper wires can be found in everything from power generation, transmission, and distribution systems to electronics circuitry, telecommunications, and numerous types of electrical equipment—consuming half of all mined copper. The red metal and its alloys are also vitally important in water storage and treatment facilitie...