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Ivanhoe Mines' Robert Friedland stated in this Bloomberg interview that although "Goldman Sachs published today [a report] calling for over $9,000 a ton copper this year... We think copper is making a bottom [and] I'd be willing to wager on $9,500 a ton before we go down to $7,500 a ton." Today (January 24, 2024) copper sits just over 8,300 per ton.
Lack of supply is one mover of prices and according to Friedland,
"the physical market is very very tight and now in deficit.. [and] [w]ith the FED likely to cut rates, the dollar-denominated price of copper is likely to go up a lot this year, by the middle of the year."
On the demand side, Friedland reminds that,
"China consumed more copper last year than any year before. So the Chinese demand is still very strong. Everyone knows about the weak real estate market in China, which is probably 20 to 25 percent of their economy, but military demand, national security demand, demand for militarization is very high... [P]hyisical offtake is very strong and inventories are extremely low so really this is like a powder keg ready to explode as soon as the FED cuts rates in the second half." Friedland continues, "Forget about the Chinese demand... India is growing, Europe is growing, and the rest of the world is growing. The demand for ESG and the ( of the world's economy remains very strong."
Frieland concludes that.
"The legacy mines are in the process of slowly dying... and it's really really difficult to bring a copper mine into production, it usually takes twenty years or so, for a tier-one mine to be discovered, built and constructed... We've had such a long period of time when all the money in the world went into... really sexy, disruptive technology but we didn't put money into mining, into basic raw materials so this is the revenge of the old economy and suddenly we have a shortage of these metals..."
