Copper will be crucial in achieving decarbonization and replacing oil with renewable energy sources, and right now, the market is facing a supply crunch that could boost the price by more than 60% in four years, Goldman Sachs said in a report on Tuesday.
Increased demand and likely low supply are set to drive up the price from the current levels of around $9,000 per ton to $15,000 per ton by 2025, the bank said.
As a cost-effective metal, copper is majorly important in the process of creating, storing and distributing clean energy from the wind, sun and geothermal sources as it has the physical attributes needed to do so, Goldman’s team of analysts, led by Jeff Currie, said in a report titled “Copper is the new oil”.
“Discussions of peak oil demand overlook the fact that without a surge in the use of copper and other key metals, the substitution of renewables for oil will not happen,’ the report said.
Copper will be needed to create the new infrastructure systems required for clean energy to replace oil and gas, however there has not been enough of a focus on this so far according to the report.