There will likely be a global copper shortage for all of 2023—and potentially for the remainder of the decade, according to CNBC.
What’s going on: Copper, a barometer of economic health owing to its use across industries, is in short supply worldwide, due to supply-stream challenges in South America and increased demand.
- Both Peru, whose copper supplies 10% of the world’s stock, and Chile, with about 27% of global quantity, have seen a decline in copper output.
Why it’s important: “A copper squeeze could be an indicator that global inflationary pressures will worsen, and subsequently compel central banks to maintain their hawkish stance for longer.”
Higher demand: China’s reopening following the end of “zero Covid” and growth and change in the automotive and energy sectors have fueled demand for copper, further straining resources.
- “You can’t see electric vehicles take off before you get the charging infrastructure, and the electrification [which is] necessary, is actually much more copper intensive,” Wolfe Research Managing Director Timna Tanners told CNBC.