“I think going forward, the next phase of this bull market is really going to be driven by supply,” said Adam Rosenkawaz of Gohring & Rosenkawaz.
The price of copper has hit this year’s all-time high, but one expert believes that the red metal still has a lot of room to move during the current cycle.
Adam Rosenkawaz of Gohring and Rosenkawaz said copper could move up to US$15 a pound.
“I think there’s a very, very strong bull market ahead,” he said, adding that after bottoming out in the late 1990s, copper rose from 2011 to 2012, going from its lowest to the highest point of seven or eight. folded up.
“This market came down in 2016 at US$1.45, US$1.50,” Rozencwajg continued. “If you apply the same type of move this time… then I believe we can certainly exceed US$10, perhaps as much as US$15.”
investment news network First Rozencwajg . spoke with in May 2018, and he noted that since then most of the copper demand-side factors that his firm had anticipated have come into play.
These include strong demand from China and India as well as a growing understanding of the role of copper in green Energy. “Now I think going forward, the next phase of this bull market is really going to be driven by supply as well,” he said, noting that there are bigger problems in this regard.
In particular, Rozencwajg said, the grade of copper heads has been steadily declining, while new copper discoveries in the past 10 to 15 years have hit an all-time low.
First those factors were mitigated by the high copper price, which allowed miners to add to their reserves by using a lower cut-off grade in their calculations. However, this became less likely when the price of copper began to fall.
What does it mean to move forward? Rozencwajg said investors can turn to companies that still have high-quality copper deposits left in the ground. “The companies we hire are usually names that we believe are high quality underdeveloped, or in the process of being developed, projects,” he said.
In addition, he suggested that an increase in copper exploration would be beneficial. However, he added, “Whether it is successful or not, I think it will be an interesting thing to see.”
Watch the interview above for more from Rozencwajg on copper supply, demand and what’s next.
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Securities Disclosure: I, Charlotte McLeod, do not have a direct investment interest in any of the companies mentioned in this article.
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