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According to Goehring & Rozencwajg Associates, Copper is currently leading the bull market among commodities, and its price growth is unlikely to be over yet. Copper prices have more than doubled since hitting a low of $ 1.95 in early 2016, and the growth of the shares exceeded more than 200%.
The last time such copper growth was observed was between 2001 and 2011. The price increased sevenfold, namely from $ 0.60 to $ 4.62 per pound. Such growth is possible now, especially given that the fundamental drivers have become even more active this year.
Therefore, it will not be surprising if prices increase at least sevenfold before this bull market ends. Using the $ 1.95 mark as a starting point, we can assume that copper prices will potentially reach a peak of about $ 15 per pound by the second half of this decade.
Copper's bullish scenario is a combination of no new supply and really high demand. In the copper mines, stagnant supply has faced huge demand. This will lead to high copper prices.
On the demand side, China's copper demand will exceed expectations, India will become a major copper consumer, and the overall global trend of switching to renewable energy sources is also increasing demand. But in terms of supply, a less positive outlook is predicted, since production growth will slow down to a complete stop in this decade.
The discovery of deposits has noticeably fallen, as well as the depletion of existing mines. It should be noted that supply problems began 15 years ago, when the copper industry began to face depletion of reserves back in 2005.
During the last rally in copper, higher prices led to an increase in the supply of mines, but this took more than five years.
The number of new copper discoveries has dramatically decreased over the past ten years, since there is a long-term delay between new discoveries and declared reserves.
There are two ways in which copper miners can increase supply – new discoveries and lower on-board content in existing reserves.
Earlier this week, Copper hit a new record.
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