Copper is the brand new oil and costs will rise 50% to $15,000, analysts say

This time, latest forces within the economy, namely the emergence of artificial intelligence, the explosion of knowledge centers and the green energy revolution, are driving demand for copper, while the event of recent weapons can be contributing to this demand, in accordance with Jeff Currie, Energy’s chief strategy officer Pathways at Carlyle.

“Copper is the new oil,” he said Bloomberg TV on Tuesday, noting that his conversations with traders also reinforced his bullish outlook. “It’s the most compelling trade I’ve ever seen.”

Copper has long been a vital industrial leader, with uses starting from manufacturing and construction to electronics and other high-tech products.

But billions of dollars flowing into artificial intelligence and renewable energy are a comparatively latest a part of copper’s prospects, Currie noted, acknowledging that he has made a contribution similar prediction in 2021 when he was an analyst at Goldman Sachs.

“I’m confident it will take off this time and I think we’ll see more momentum behind it,” he said. What’s different this time is that there at the moment are three sources of demand – AI, green energy and the military – reasonably than simply green energy three years ago.

And while demand is high, supply stays tight as latest copper mines can take 12 to 26 years to come back online, Currie stressed.

This should ultimately result in a price increase to $15,000 per tonne, he predicted. Copper prices are already at record highs, with benchmark prices in London hovering around $10,000 a tonne, greater than doubling pandemic-era lows in early 2020.

At some point the worth will get so high that there might be “demand destruction,” meaning buyers will draw back from paying that much. But Currie doesn’t understand how high that level is.

“But I go back to the 2000s, I was bullish on oil then, just like I am on copper now,” he added, recalling that crude oil then rose from $20 to $140 a barrel be. “So the upside potential for copper here is very large.”

Copper was also a key catalyst for BHP’s proposed takeover of Anglo American, a $40 billion deal that may create the world’s largest copper producer. But Anglo rejected the offer and recently announced plans to restructure the group, including the sale of its De Beers diamond business.