Copper Demand Dynamics Create Opportunity for Miners
Fortunately, the factors driving the copper price surge are driven primarily by supply/demand fundamentals.
SEATTLE (Scrap Monster): Advisors and investors looking to keep a close eye on the metal markets would be remiss not to be interested in how copper has been doing as of late.
The price of the red metal has continued to approach new record highs, buoyed by a variety of applicable factors. However, given the recent selloff in gold and silver, some investors may be curious whether the momentum in the copper space is built to last.
Fortunately, the factors driving the copper price surge are driven primarily by supply/demand fundamentals. Copper has a critical role in a range of applications, including power grids, electrification, and AI infrastructure. The AI theme is especially critical, as investment signals indicate that AI infrastructure expansion and data center demand won’t be slowing down any time soon.
Demand for copper may be high, but can supply keep up? While the exact number may vary, several projections expect copper shortfalls of 7 to 10 metric tons by 2040. And with supply disruptions continuing to pop up, optimism over the future of copper stockpiles is, well, in short supply. That being said, these supply deficits—along with persistent demand for the red metal—could create a potential portfolio opportunity for advisors and investors.
“Looking at this from an investment standpoint, there’s a significant opportunity in the copper miner space, because they’re the ones that are in the front lines of increasing this primary production, and that’s where we expect to see a lot of the investment happen over the next decade to two decades,” noted Steven Schoffstall, Managing Partner at Sprott & Head of ETFs at Sprott Asset Management USA, in a recent interview.
Courtesy: www.etftrends.com