Copper Prices Poised for Further Gains Amid Supply Shortages
Fund managers and analysts remain bullish on copper due to supply shortages and underinvestment in new mines, leading to rising prices. The red metal has become a key focus for large miners as it holds the potential for technological advancements in a rapidly shifting landscape.
BHP's (ASX:BHP) biggest earner over the past financial year was copper, overtaking iron ore as the central ingredient for urbanization and industry. With AI-driven expansion requiring more energy-hungry resources, demand for copper is expected to rise further, driven by forecasts from BHP and S&P showing a 50Mt increase in demand by 2050.
Victor Smorgon Group's Ben Salter says higher prices are needed to incentivize new projects, with majors forced to build lower-grade or deeper mines. Salter believes that price will eventually solve the supply gap issue, but in the meantime, incumbents will reap the benefits.