Copper prices are poised for an unprecedented surge, with Pierre Andurand, a prominent hedge fund manager, predicting that the metal could reach an astounding $40,000 per ton within the next few years. This projection follows a recent milestone where copper breached $11,000 per ton, driven by a significant imbalance between supply and demand.
Andurand attributes the expected price explosion to a confluence of factors, including the global push for electrification, which heavily relies on copper for electric vehicles, renewable energy infrastructure, and other technologies. As the world embraces green energy, demand for copper is set to double, further strained by geopolitical tensions and the rise of artificial intelligence.
However, the supply side is struggling to keep pace. Copper production is facing significant challenges, with both new and existing mining projects failing to meet the growing demand. Last year, global copper inventories reached their lowest seasonal level since 2008, a trend likely to push prices even higher.
Despite these challenges, the industry appears to be leaning heavily on existing mines and mergers and acquisitions (M&A) as a short-term strategy. This trend is exemplified by BHP’s recent bid to acquire Anglo American, showcasing the desperation to secure more copper resources.
Andurand’s forecast is far more aggressive than other industry experts, like Jeff Currie, who predicts copper prices could reach $15,000 per ton in the coming years. While Andurand acknowledges that prices may not remain at $40,000 indefinitely, he emphasises that any significant supply response would take years, given the lengthy process of opening new mines, which typically spans 15 years.
The path to a new equilibrium in the copper market seems distant, with firms likely to continue their M&A activities as they scramble to address the impending supply crunch.
Jubilee Metals Group plc (LON:JLP) is a diversified metal recovery business with a world-class portfolio of projects in South Africa and Zambia. The Company’s expanding multi-project portfolio across South Africa and Zambia provides exposure to a broad commodity basket including Platinum Group Metals, chrome, lead, zinc, vanadium, copper and cobalt.
