Copper Has Potential To Reshape Wealth Creation In 5–10 Years: Analyst
Copper, the quintessential industrial metal used across sectors, recently touched its all-time high.
While chasing the strong gold and silver rally, Indian investors might be missing the opportunity to bet on a metal that is forming the backbone of the future economy.
Copper is a metal with a potential to "reshape wealth in the next 5-10 years", according to Sujay U, a senior analyst at Bengaluru-based AB InBev.
In a post on LinkedIn, Sujay highlighted that copper is quietly becoming the backbone of the global economy. Every electric vehicle, solar panel, 5G tower, charging station and data centre relies on it. "You already use it 100 times a day without realising it," Sujay said, detailing the factors that could help Copper explode in value.
According to Sujay, the simple math is that the world is going electric, which runs on copper wires. “One of the world’s biggest copper mines, Grasberg (Indonesia), has faced shutdowns due to floods and accidents, and the result is production risk of 600,000+ tons by 2026. This is the major supply shock,” he said.
Sujay further explained that new copper mines take 10-15 years to start, existing mines are running out, creating a gap.
"Copper recently jumped 3-3.5% in a single day on supply news. Analysts like Goldman Sachs and Citi estimate copper could reach $11,000 to $14,000 per ton over the next 2-3 years if shortages continue.
"That means a potential 20-50% upside, based on market trends. China removed solar subsidies, companies rushed to install solar before rules changed, and copper demand spiked for wiring and grids. Short-term frenzy, long-term green revolution = copper stays essential,” the post read.
According to Sujay, every copper bull run in history began with a supply squeeze and ended with record price highs.
“Governments are spending trillions on Infrastructure, EV adoption, power grids, railways and manufacturing. While gold sits in vaults, copper works 24×7 in the real world. A productive asset versus a stored asset. So, the real question isn't whether copper will go up; it's whether you will pay attention before it does,” he said.
Referring to investors' continued preference for gold, Sujay concluded his post: “One sits in lockers. The other runs the future, and the future may just reward the one who saw it early.”
Copper, the quintessential industrial metal used across sectors, recently touched its all-time high. Last Wednesday, Copper prices on the London Metal Exchange surged to a lifetime nominal high of $11,200 per metric ton, before cooling down. In the latest trading session, Copper closed at $10,720 per ton at the London Metal Exchange.
