Copper, a key input in the ongoing transformation to clean energy, has seen a significant surge in demand due to its use in batteries, solar thermal heating and cooling systems, wind turbines, generators, and other applications. The global shift towards clean energy sources, coupled with the rise of generative AI technologies, has positioned copper as a crucial element in the next industrial revolution. With demand for copper expected to reach 40 million metric tons in the next 15 years, the metal’s role in shaping the future of energy consumption cannot be understated.
While copper demand continues to rise, supply constraints and geopolitical barriers in South America have created a tight supply situation. The recent economic downturn in China, which accounts for half of the world’s copper demand, may lead to a slowdown in consumption. However, overall demand for copper remains robust, driven by the increasing adoption of clean energy technologies and advancements in AI. This demand-supply imbalance is likely to support copper prices in the long term, making it an attractive investment opportunity for traders and investors alike.
From a technical perspective, Southern Copper (SCCO) recently experienced a breakout from a triangle consolidation, reaching a high of $5.21 before pulling back to around $4.39-$4.54. This correction phase is expected to find support in the $115-$105 zone, presenting a potential buying opportunity for investors. With earnings expected to grow by 27.55% in 2024 and 19.33% in 2025, Southern Copper has demonstrated strong financial performance, further reinforcing its position as a promising investment prospect. The alignment of technical indicators with underlying fundamentals lends credibility to the bullish outlook on SCCO and the copper market as a whole.
The future of copper looks promising, driven by the increasing demand for clean energy technologies and advancements in AI. Despite supply constraints and geopolitical challenges, copper prices are expected to remain buoyant in the coming years, presenting opportunities for investors to capitalize on this growing market trend. As we navigate the complexities of the global economy and technological advancements, copper stands out as a critical component in the transition towards a more sustainable and innovative future.