Energy Prospectus

Note from Energy & Capital 6-8-2024

Why Demand for Copper Will Continue to Rise

Electric Vehicles (EVs): EVs use significantly more copper than traditional vehicles. With the global push towards greener transportation, the demand for copper is set to soar.

Renewable Energy Systems: Solar and wind energy systems require vast amounts of copper for wiring, transformers, and inverters.

Infrastructure Modernization: Many countries are investing in upgrading their infrastructure. This includes expanding electrical grids, modernizing telecommunications networks, and enhancing public transportation systems — all of which require substantial copper.

Urbanization: As developing countries continue to urbanize, the need for copper in construction, electrical systems, and public infrastructure will grow.

Technological Advancements: The rise of the Internet of Things (IoT), 5G networks, and other technological advancements will further drive copper demand.

Copper, the "metal that built modern civilization," also plays a significant role in the cryptocurrency and artificial intelligence (AI) markets.

Here are a few reasons why demand for copper will remain strong:

Increased Computing Power: Both cryptocurrency mining and AI require powerful computing hardware, driving demand for copper in components and infrastructure.

Expansion of Data Centers: The growth of data-intensive applications necessitates more data centers, which rely heavily on copper.

Advancements in Networking: The push for faster, more reliable data transfer and connectivity will continue to drive the need for copper in networking equipment.

In conclusion, copper is integral to the infrastructure of both cryptocurrency mining and AI. Its unique properties make it indispensable in the hardware and systems that power these advanced technologies.

As these fields continue to expand and evolve, copper’s role will only become more critical, further solidifying its status as a key industrial metal in the digital age.

Brian Hicks

In April, David Einhorn's Greenlight Capital said it had made a "medium-sized macro position to benefit from higher copper prices."

"Our thesis now is that copper supply is about to fall short of demand, forcing prices substantially higher," Greenlight said in a letter to clients, adding, "We think the best way to invest in that thesis is the most direct way — in this case through options on copper futures."

Goldman's McGeoch said, "A supply shock doesn't get the price from $10,500 to $12,000. It's what takes us from $15k to $20k."

Also, Jeff Currie, who led commodities research at Goldman for nearly three decades, recently told Bloomberg's Odd Lots that copper "is the most compelling trade I have ever seen in my 30 plus years of doing this."

https://www.zerohedge.com/commodities/copper-breaks-trend-line-trafigura-questions-spike-hedge-funds-bet-big

Read this: https://irinaslav.substack.com/p/red-shiny-conductive-and-scarce?utm_source=substack&publication_id=376351&post_id=144986680&utm_medium=email&utm_content=share&utm_campaign=email-share&triggerShare=true&isFreemail=false&r=xn3en&triedRedirect=true

Irina Slav is a very smart lady who writes for OilPrice.com