Threat of a copper shortage
In the first four months of 2021, copper inventories were below 2020 levels, and LME stockpiles, according to industry insiders, will fall. This could raise fears of a physical copper shortage in the short term. On the other hand, mine supply is recovering, as twelve major mine projects will come on stream. Copper production is also recovering at existing mines. The long-term outlook is expected to be robust. Copper supply should recover by 2022/2023.
With regard to copper demand, robust growth is expected, but a lot will have to happen for supply to keep pace with demand. The risk of tax changes in Chile and Peru also poses risks for the medium-term copper supply.
The energy turnaround and the increasing number of electric vehicles over the next ten years are in any case seen as clearly positive long-term drivers for copper demand. If the infrastructure and construction plans on the part of China or the USA, for example, remain in place for a longer period of time, this will also support copper demand. In these areas, there is also no substitute for the reddish metal. As with many other raw materials, the metal content per ton of rock is falling in copper mines, and in some places there are also labor disputes. In this scenario, the price of copper rose to a record high in the first half of 2021, breaking the USD 10,000 mark at the end of April.
That's where you could think about investing in companies that have copper in their projects.
For example, in Copper Mountain Mining. Its Copper Mountain Mine in British Columbia, in which the company holds a 75 percent stake, just posted record production.
Hannan Metals - https://www.youtube.com/watch?v=5h_WB1_wKBM - owns the San Martin copper-silver project in Peru and has staked 88 mineral concessions there.
Current corporate information and press releases from Copper Mountain Mining (https://www.resource-capital.ch/en/companies/copper-mountain-mining-corp/) and Hannan Metals (https://www.resource-capital.ch/en/companies/hannan-metals-ltd/).
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