According to Matt Badiali, copper is required for Tesla to manufacture electric cars. Codelco is the copper giant, and their experts believe by next year copper could be selling for $10,000 per metric ton. This would be a price increase of 46 percent, and last year prices rose 50 percent. Codelco believes there is an imbalance between supply and demand, and there will not be enough copper to satisfy the demand. This is what causes the prices to rise.
As the Chairman of Codelco, Oscar Landerretche stated in an interview the company is predicting increased deficits, He said there is no known reason to close these deficits in the future. The change in Codelco’s opinion is attributed to the accelerated growth of the electrical economy, and this change was unexpected according to medium.com. The supply of copper coming from the mines is reacting slowly, yet it can move quickly. When this occurs, the price will be severely impacted.
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Morgan Stanley attributes the increased demand for copper to electric vehicles. The average vehicle requires 165 pounds of copper. The battery alone contains more than 88 pounds, and is generally twenty percent copper. Roughly 38.7 percent of the copper supply is consumed by electrical products, with thirty percent attributed to building construction. The price of copper increases with good economic growth, when the growth decreases the price goes down.
Demand is currently rising, and Goldman Sachs, the giant investment bank has increased their annual target price to $3.20 for each pound according to crunchbase.com. Considering copper was selling for $2.75 for each pound in 2017, this represents a serious increase. Copper is hot now, but if the price increases it will explode.
One of the most popular monthly investment advisories is the S&A Resource Report, and the editor is Matt Badiali. The report places their focus on natural resources including uranium, copper, silver, natural gas, gold, water and oil. Matt Badiali additionally contributes to the Growth Stock Wire. This is a pre-market, free briefing specializing in the most popular trading opportunities of the day. He is highly experienced as a geologist, consultant and hydrologist for the oil industry. His education was received at the Florida Atlantic University, and his Master’s degree is in geology.
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