TSXV:BAY - Post Discussion
Post by
Fishercat1 on Apr 25, 2024 8:25am
Its Coming Boys . Be Ready.
Copper $10k in the Crosshairs Copper tagged a two-year high in recent sessions, coming within a hair of taking out $10k per ton, as the slope along the demand curve ratchets higher - Copper Nears $10,000 as Investors Bet on Rising Global Demand. With the global megatrends of decarbonization and electrification finding a whole new gear, investors are finally beginning to clue in that the demand surge is real, and that miners are struggling to meet it. | |
According to Ivn Arriagada, CEO of Antofagasta Plc via a Bloomberg piece last week: "Projects are becoming bigger, the capital intensities are high, and therefore these are very tough decisions" (Antofagasta finally pulled the trigger on a $5.4 billion expansion plan at its Centinela mine in Chile late last year, a decision the producer has been mulling over for quite some time). Santiago-based research firm Cesco crunched the numbers and found that the investment needed to produce a ton of copper in Chile has shot up fivefold since 2006. | |
Goldman Sachs figures the industry needs to spend $150 billion over the next decade to address a projected 8-million-ton annual supply shortfall. Prices north of $10,000 a ton will be required to incentivize new development scenarios. CRU, a metals research and consulting firm based in London, is less bullish about copper demand than many forecasters but still recognizes the supply-side constraints. Mines are getting smaller and more expensive to build, with more than one-third of future projects located in jurisdictions where investors face significant political and regulatory risks, such as Congo. “The stuff is in the ground,” says CRU’s head of base metals, Simon Morris. “It’s whether there’s really the will to do it.” | |
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