Is copper the next battery material to go exponential?

Published 02-JUN-2022 14:29 P.M.

2 min read

Macro: Copper

Long time readers will know that we have based a fair few of our Investments around the electrification macro thematic. The following transcript from the “Odd Lots” podcast published by Bloomberg shines the light on one of the most critical industrial metals in the world, copper.

Read the full article here.

According to Goldman Sachs, thanks to booming demand for electric vehicles (EV’s) and the overall shift to electrification, coupled with minimal investments being made into new mine capacity, alongside minimal investment in new mines, copper might be the tightest commodity market the world has ever seen.

The key topics touched on in the podcast are as follows:

Why the copper deficit is going to get so big — 5:35
Why total demand is going to boom — 8:15
Where will the copper come from? — 11:30
It takes longer and longer to build a new mine — 14:22
Peak production is on its way — 22:13
The copper bear case — 30:06
Why copper $100K is possible — 35:19

This isn’t the first time Goldman Sachs have spoken about the tightness in the copper market, late last year publishing “Copper is the new oil” just over 12 months ago now, where again the US investment bank claimed that “A surge in green capex—combined with the lack of copper mining projects—will lead to a multi-year bull market in copper”.

We tend to agree with this viewpoint, with copper already the 2nd most used industrial metal in the world and the electrification boom likely to increase demand by multiples from where it is today we think the outlook for copper demand is likely to outstrip the supply response.

This is why we hold Investment exposure to copper explorers across our portfolio’s. Below is a list of these portfolio companies:

Kuniko (ASX: KNI) - Next Investors Portfolio