The metal that launched a thousand turbines

Last week, media reported that Hertz was buying up to 175,000 electric vehicles from GM. As CNN noted in its report, the rent-a-car major had earlier disclosed plans to buy some 100,000 Teslas and 65,000 EVs from Polestar. More than 300,000 fresh EVs for the emission-conscious drivers should be good news. But it depends on the price.

In completely unrelated news, a wind farm project in Canada went significantly over budget because of unforeseen cost increases resulting from “inflation and ongoing global supply chain issues caused by COVID-19-related lockdowns around the world.” I feel compelled to say “You ain’t seen nothing yet” here. Because prices for both EVs and wind projects are soon going to shoot up.

“Copper is a reddish-gold colored metal that is ductile, malleable, and an effective conductor of heat and electricity. Copper was the first metal to be worked with by humans and is among the most widely used metals today,” Investopedia tells us. One might add that copper is essential for the transition to renewable energy. But only if there’s enough of it.

For months now people from the mining industry and some of the more rational analysts have been warning of a copper deficit. Yet because the price of copper has been down on fears of recession sapping demand, few appear to have believed it. And miners have continued to withhold investments in new production capacity at a time when existing capacity is shrinking.

MetalMiner reported earlier this month that the copper market could swing into a deficit in three years. That’s according to analyst heavyweights such as S&P Global. Yet the price of copper is down 25% since the start of this year. That’s not very bullish, is it?