A New Copper Supercycle Is Emerging

By Paul Wong and Jacob White – Sprott

• The Nasdaq Sprott Energy Transition Materials Index rose in May—its third consecutive month gaining 6% or more—as favorable overall market conditions and global growth expectations benefited commodity resources broadly.
• A new supercycle is emerging in the copper market, built on several rising geopolitical and market trends contributing to a strong bullish outlook for copper prices.
• The global push towards clean electrical energy, coupled with protectionist moves by countries looking to secure vital materials, is driving an unprecedented surge in copper demand.
• At the same time, copper supply is constrained following years of underdevelopment, expanding protectionist policy measures, and a continued preference among copper producers to grow by M&A (mergers and acquisitions) rather than greenfield development.