Is Copper the New Gold?

Forecasts of disinflation in 2024 have thus far missed the mark. Some of the disappointment has lingered from last year: housing costs have been stubbornly high, while services remain an inflationary risk. Outright price declines of many goods provided a helpful offset.

Deflation for goods is unlikely to last. Supply chains are being realigned with an eye toward resilience rather than only low cost, while investment is concentrated in specific sectors that require particular inputs. No commodity tells the story more clearly than copper.

Demand for copper is elevated, and poised to grow. The metal is crucial to electronic components that are in high demand. The boom in artificial intelligence is pushing up the need for both microprocessors and power-hungry data centers. As market share shifts toward electric vehicles, the batteries and wiring of EVs require more copper than conventional powertrains do.

Infrastructure investments in the electric grid and power components like solar panels and EV charging stations will add to copper demand. Homebuilding also continues apace, and more residential construction means more copper purchases for home plumbing and wiring.

Metals Price and Copper Supply Deficit Forecast