Analysts see short-term strength, long-term 'generational shift' in copper prices

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Analysts see short-term strength, long-term 'generational shift' in copper prices
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Along with experiencing a short-term supply shortage, copper is set to undergo a 'generational shift' in demand as decarbonization ramps up, according to BNY Mellon.

Beyond the quantities of copper that are likely to be required to achieve net-zero goals, Chu also highlighted a decline in the grade of the metal over the last 20 years, as well as the length of time it takes to get major mining projects online.

"When you look at the long-term secular story, you can just see strong demand. A lot of people focus on lithium as the kind of energy transition metal, but I think we should be much more focused on copper, because I think that is the real pinch point, the real choke point for the energy transition story."

"But there's only so much those markets can do because the incremental demand from renewables isn't a small bump up in demand, it's almost a multiyear tsunami of demand coming through that we're not thinking about, so it's going to be all hands on deck but absolutely, the price has to go up," Chu said.

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