Despite strong recession signals the U.S economy, Copper alongside with Lithium stand out as two metals that will be in demand in the upcoming years. Copper is an essential component for electrical equipment due to its conductivity. Growing demand in the electrical appliances industry in particular EV sector in the recent years has kept the commodity in demand. Growing production of EV's pledged by major car manufacturers such as Ford, General Motors, and Hyundai signal further use for the commodity as the EV sector pace for expansion.
Copper got out to a slow start this year due to lower production statistics from China (largest consumer of copper). Markets are anticipating a pick-up in consumption and demand from China as the business cycle churns into Q3. The LME just experienced a drop in availability of the commodity due to large exports and terminating warrants/contracts to replenish supply over the coming weeks. Companies such as Freeport McMoran and Rio Tinto are balancing their sheets with more investments in their copper mines anticipating increasing demand.
We could see $4.20ish levels tested in the upcoming quarters. All-time highs around $5 were reached by the commodity post-Pandemic. We can expect a rally to all-time levels leading into 2024-2025 as markets embrace an EV revolution.
Let's see how the 🎲 roll.
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