Cu

There is a risk that the world’s largest copper producer is talking its own book, but there is something a bit ‘ooh-err’ from the perspective of a global economy in the early innings of an energy transition, when the Chairman of Codelco warned an industry conference that there is a massive shortage of copper looming. Massive. Come the beginning of the 2030s, the world will be looking at a deficit of about eight million tonnes. This is much more than the current consensus. Much more. For want of context, current annual demand is about 25m tonnes, so eight is a big deal. To add further context, there was a bit more sucking of teeth courtesy of a sub-heading in a October 8^th Bloomberg report: ‘China’s bonded warehouses are all but empty’. Ho-hum. For many years traders have got all revved up about the size of the pile of copper that was stuffed into the corner of a Shanghai warehouse. Some chatted online that it was up to 1m tonnes, hence a persistent bearish force on the spot copper price. However, rumours abound the warehouse is now nearly empty and commercial users are paying up for anyone who can make good on delivery. The market is super tight. When adding in the stores at COMEX and the LME, global supplies fast are approaching record lows, just as the green energy transition starts to stride it out. What adds further season to the soup is the data out of India, a country many believe to be at the same stage in development as China was back at the turn of the millennium and where copper demand is about to sky-rocket. Demand, this year alone, is up 45%. And it’s not going to stop. The story in coming years, is not about China and an empty warehouse in Shanghai, it’s about India. All told, the top man at Codelco could have a point, more so when the only source of supply growth this year is out of the massive Kamoa-Kakula project. Kamoa-Kakula is based in the DRC. The Democratic Republic of Congo. A country ranked 183 in the, much followed, ‘ease of doing business index’. Crumbs.