This past month I was asked to reprise my keynote to the annual gathering of wire and cable manufacturers. I was humbled and honoured to be invited back in 2017, and even more so for this contemporary 2021, post-copper price rise follow-up that I delivered two weeks ago. I attach a link to the video here and below share a few brief notes.
I recall my 2017 edition in Munich, Germany where after presenting my set of data and facts I asked the 200 strong audience – truly the who’s who of electrical cable manufacturing – who thought the price of copper would average lower? Few hands. Then, when asking who thought the price of copper would be “stronger for longer” well into the future, a sea of hands went up. You could hear a pin drop. I asked, what are you waiting for?
The copper price was up 0.20 /lb the next day and for the following months the price three times attempted to break-through $3.30/lb resistance… until that fateful day when the trade tariffs began. Sigh.
Anyways, in the months and years that followed I endeavoured to better understand the thinking of people that buy vast quantities of copper and/or aluminum for electrical applications. Afterall, collectively, that is where 75% of the global copper demand is today, before the electro-revolution begins. My findings reinforced my conviction that this industry operates hand-to-mouth and that “when” and not “if” speculators get involved (because they always do where there is a trade to be made) the price of copper would soar higher.
Important Note: Junior mining investors should never forget that NOBODY in the world wants high copper prices. This can only be sustained if the industry literally runs out of copper. If business is good, these guys will keep buying because they have no choice and they eventually pass that higher price to industry.
The cover image of my presentation is the outer shell of a Lithium-Ion battery, provided to global investors from an incumbent energy disrupter based in Northern California named after a famous Serbo-Croatian Scientist. The graphic debuted at their so-called “battery day” back in September 2020 and that, we can now say, is the day that kicked-off the heightened interest of Wall Street into electro-metals. A beautiful image indeed for copper investors.
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