The Strategist

Global economy expected to face serious shortages of copper



09/23/2022 - 06:28



The shortfall of this metal on the global market will only get worse in the future as a result of the current decline in copper prices. The rise of capital investment in the expansion of copper production is hampered by weakening of quotes.



JM via flickr
JM via flickr
Copper is required for the manufacture of a variety of products, from computer chips and toasters to air conditioners. Since March, the metal's prices have decreased by almost 30%.

Investors worry that the global economic downturn will drastically reduce demand for copper, consumption of which rises during periods of rapid industrial and economic expansion.

The biggest producers and traders forecast that the global copper market will be significantly short of supply in two years or more, although the current state of the copper market barely suggests that.

The scarcity will be so severe that it will be able to slow down global economic growth, raise inflation through increasing production prices, and obstruct implementation of climate policy objectives. The current price decline and the resulting lack of capital investment will only make the problem worse.

source: bloomberg.com

 




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