Citigroup Says To Buy Copper Now Before The Rally To $15,000

In an interview with Bloomberg this week, Max Layton, Citi’s managing director for commodities research, said he believes now is an ideal time for investors to buy, as the price of copper is still muted on global recession concerns. The red metal is currently trading around $8,300 a ton, down approximately 26% from its all-time high of nearly $11,300, set in October 2021.

According to Layton, copper could top out at $15,000 a ton by 2025, a jump that would “make oil’s 2008 bull run look like child’s play.”

Citi Sees Copper Topping Out

Citi also pointed out that copper may dip further in the short-term but could begin to rally in the next six to 12 months as the market fully recognizes the massive imbalance between supply and demand, a gap that’s expected to widen as demand for EVs and renewables expands.

Internal Combustion Vehicle Sales Set To Peak This Decade: BloombergNEF

As I’ve shared with you many times before, EVs can use up to triple the amount of copper as traditional internal combustion engine (ICE) vehicles do. This poses a problem, as fewer and fewer copper deposits are being discovered, and the time between discovery and production has lengthened over the years as costs rise. According to S&P Global, of the 224 copper deposits that were discovered between 1990 and 2019, only 16 were found in the past 10 years.

Meanwhile, EV sales continue to rise. Last year, these sales reached a total of 10.5 million, and projections by Bloomberg New Energy Finance (NEF) suggest that they could escalate to around 27 million by 2026. Bloomberg predicts that the global fleet of ICE vehicles will peak in as little as two years, after which the market will be dominated primarily by EVs and, to a lesser extent, hybrids. By 2030, EVs might constitute 44% of all passenger vehicle sales, and by 2040, three could account for three quarters of all vehicle sales.

Internal Combustion Vehicles