JP Morgan’s views on copper for investors

JP Morgan just did something remarkable.

No, I’m not talking about First Republic Bank.

They released a note on copper with crucial insights on what’s coming ahead for investors.

Here are your key takeaways:

Refined copper demand:

• Forecasted to grow by a CAGR of 2.5% over the next decade (vs 2%).

• Over 32MMT by 2033, or 7MMT higher than 2023 forecasts.

Energy transition demand:

• To grow by a CAGR of 11% from 2.5MMT this year, to 8.5MMT by 2035.

Copper intensity of GDP & energy transition:

• In developed regions such as North America and Europe, forecasted to reverse a decades-long fall.

• China is set to continue significant declines but slowing down.

• Globally, continuing to move sideways to 2035.

10-year forward supply gap:

• scrap usage partially offset declines in mine supply, yet gap ~7.4 MMT, with deficits accelerating.

• larger-than-normal but not unprecedented…

But, hold on…

What’s different now?

• Low pipeline of advanced-stage projects coming onstream delayed by:

• Tech: Declining grades, deeper deposits plus water scarcity.
• Other issues: Long permitting timelines, ESG, political and royalty environments.

📊 @SPGCIMetals | @synergyrescap

Copper price:

• Incentive price range sits at $8,500/mt ($3.9/lb) to $9,500/mt ($4.3/lb).

• Higher prices have brought more approvals over the last 2y, but…

• ~70% of projects were cheaper/easier (brownfield).

Main risks ahead:

• Lead times for large greenfield projects significantly extending

• Continued low inventories

All of this comes down to:

New capacity may not come online quickly enough to satisfy growing demand.

📊 @GoldmanSachs

And that’s it for today.

There’s no decarbonization without copper.

Billions of dollars need to flow into the exploration, development and construction of new mines.

And quickly.

In a nutshell, copper is truly the king (even if it’s not being crowned this weekend)!

If this was interesting or useful to you, I’d truly appreciate if you could retweet the start of the thread.

Follow me @paola_rojas for more on metals, minerals and related M&As.

But wait!

JP Morgan just did something remarkable.

No, I’m not talking about First Republic Bank.

They released a note on copper with crucial insights on what's coming ahead for investors.

Here are your key takeaways:

— Paola Rojas 🐝 (@paola_rojas) May 5, 2023

PS: We also discussed this with Lucho Saenz in a recent podcast if you’d like a more nuanced discussion:

And…

JP Morgan: copper demand RISING in 2023 & beyond; Glencore HOLDS ON to Teck bid | E2: Deals Podcasthttps://t.co/efcGCMuA2w

— Paola Rojas 🐝 (@paola_rojas) April 28, 2023

And here’s another thread on copper you may enjoy!

Now I’m done. Have a great weekend!

Copper is crucial for decarbonisation, yet we've been underinvesting for over a decade.

To be copper-ready we must step up.

Here's the skinny on porphyry deposits to help you take advantage of this lifetime opportunity.

— Paola Rojas 🐝 (@paola_rojas) September 19, 2022