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Copper

After more than doubling in price since 2020, copper went on an epic tear, taking out the $5.00 level in a dramatic flurry due to its misaligned supply/demand dynamics.

But with the U.S. Fed going all gangster on interest rates as it attempts to suck the life out of the current inflationary spiral, copper has seen a significant break below key support levels.



This breakdown on the charts has to be viewed as a transitory phenomenon. The underlying fundamentals are too powerful, too compelling, too urgent.

If our species is to reach its goal of reducing global greenhouse gas emissions by 50% over the next eight years and achieve Net-Zero by mid-century, more clean energy alternatives - more EVs, more solar panels, more wind turbines, etc - will need to roll off the assembly line floor.

Since copper represents one of the very best conductors of electricity and has taken on a critical role in the electrification process, the supply-demand dynamics have taken on a surreal quality.

There will be seven million EVs hogging the passing lanes of American roads and highways by 2025, along with roughly five million charging stations to power them - Copper Drives Electric Vehicles.

Due to the metal's durability, high conductivity, and efficiency, the numbers stack up like this:

• Conventional cars require 18-49 lbs of copper.
• Hybrid EVs require 85 lbs.
• Plug-in hybrid EVs require 132 lbs.
• Battery EVs require 183 lbs.
• A hybrid EV bus requires 196 lbs.
• Battery EV buses require 814 lbs.

Wind power? Big numbers there too - 20% Wind Energy by 2030: Increasing Wind Energy's Contribution to U.S. Electricity Supply.

The same goes for solar - Search For New Copper Sources Reportedly Intensifies As Green Revolution Drives Demand High And Inventory Dwindles.

As the above headline suggests, the search for new sources of the green metal needs to find a whole new gear. More (copper) super-pits need to come online pronto—waaaay more.

All told, the global demand for copper has risen from about 17 million tons per year in 2010 to 25 million tons today. It's projected to exceed 31 million tons by 2030.

But for now, the soft, malleable metal is trading in reaction to the Fed's aggressive tightening cycle - COLUMN-Copper crushed as funds turn negative on recession fears: Andy Home.

In a recent Briefing, we asserted (to paraphrase):

"Our current green energy transition ‘plan,’ if you can call it that, appears hopelessly flawed. We DO NOT have enough lithium, nickel, copper, etc to make this transition possible - Metals shortages ahead, net-zero targets at risk — BofA

We must reverse a multi-year declining investment trend by pushing new deposits along the development curve. Fatter stacks of cash need to flow into the exploration, development, and production of these scarce resources if we hope to achieve net-zero by mid-century - $100 Billion Investment Needed to Address Copper Supply Deficit.