Forte Minerals Corp.’s Post

Copper and aluminum prices have tumbled after a significant rally, with copper dropping 2.9% to $10,159 a ton and aluminum falling 2.7% to $2,692.50 a ton. This decline is driven by profit-taking and concerns over market fundamentals, as copper reached record highs earlier this year due to tight mine supply and optimism in manufacturing and renewable energy sectors. Despite the retreat, experts highlight a disconnect between investor expectations and physical market realities. China’s stringent capacity controls to meet emission goals, including limiting new copper smelters and requiring advanced energy efficiency for new aluminum and lithium battery production, add another layer of complexity. Historically, Chile has been a critical player in copper production, leading global supply for decades. Recent data shows that Chile continues to dominate the market, though the current price volatility underscores the fragile balance between supply constraints and growing demand, especially in the context of emerging technologies and environmental regulations. This dynamic landscape makes the future of critical minerals both unpredictable and fascinating, particularly as nations like Chile adapt to maintain their pivotal role in the global economy.

Was that the Copper Price Starter’s Gun?   After nearly 2 years of waiting, the much-anticipated surge on the copper price may have started. Yesterday was one of the busiest days on the London Metal Exchange for copper on the news that 15 smelter plants in China discussed potential production cuts aimed at coping with a plunge in processing costs (treatment charges). The plunge has been driven by direction given by copper mining producers on output reductions, leaving smelters with not enough copper concentrate to smelt.   Copper is seen as the crucial mineral empowering the energy transition. The renewable energy sector is dependent on copper with demand anticipated to double by 2050. As the key ingredient in energy solutions that bring about net zero targets, the reliance on the EV market on this metal and with recent mining production challenges in South America, the anticipated race for copper supply may have started.   Hitting an 11-month high of almost $9,000/t, some analysts are even forecasting a market deficit in copper of up to 1 million tons this year.

▪️The #energytransition will see #copper demand grow by 75% to 56 Mt by 2050 ▪️Meeting this demand will require major investment ▪️ Nations seeking supply diversification away from #China need to consider the full supply chain, with downstream processing and semi-manufacturing sectors presenting the biggest challenge to the #supplysecurity agenda ▫️Mining: China’s domestic supply accounts for just 8% of global mine output, or up to 20% including Chinese mining assets overseas ▫️Smelting and refining: since 2019 China has added 97% of global capacity: >3 Mt of production and ~US$25 billion in investment ▫️Fabrication: China has added ~11 Mt of copper and alloy capacity since 2019, or 80% of global additions ▪️ Over the last 20 years, downstream capacity has barely changed outside China ▪️ Nearly US$85 billion investment in new smelting and refining capability would be needed to displace Chinese supply Wood Mackenzie Horizons examines strategies to secure copper supply chains and explains why de-risking maybe more about compromise than decoupling. 🗓️ To find out more, access the report and join a virtual event on 28 August:

A big problem with critical minerals like lithium, gallium, manganese, etc., is the price fluctuations -- and the lack of ways to hedge against them. "Big" metals, like steel, aluminum, copper, zinc, and nickel trade on the London Metals Exchange. The LME is by no means perfect, but it's an option. This option doesn't exist in the same way for critical minerals with smaller and "lumpier" trading volumes -- where most sales happen in China, and via long-term contracts, and where spot trading is more rare. As the authors in this Council on Foreign Relations article note, "Currently, for many critical minerals, including lithium and cobalt, the only physically-cleared benchmark contracts (a preferred hedge for producers) are on exchanges like the Guangzhou Futures Exchange (GZE). Cash-settled contracts exist but are also highly affected by Chinese supply dynamics and imperfect as hedging tools for producers." To have a robust critical minerals infrastructure outside of China, you need the trading capability, too.

Analysts identified 239 copper deposits discovered between 1990 and 2023, containing 1.315 billion tonnes of copper in reserves, resources and past production. Of those, five have at least 500,000 tonnes of contained copper. Most of this comes from the expansion of older discoveries and deposits found during the 1990s. Despite exploration budgets increasing 12 percent in 2023, there were only four discoveries during the previous five years (2019 to 2023) totaling 4.2 million tonnes of copper, underscoring the decline in major discoveries. https://lnkd.in/dgpvwxkx

Nowadays, miners looking to shine need exposure to copper, the future-facing commodity whose price is expected to rocket as the energy transition wraps electricity cables around the earth.  The problem is that picking up copper assets on the cheap is hard to do in a market that appears to be entirely populated by copper bulls. The strong performance of Chilean copper miner Antofagasta, whose shares have gained nearly 30 per cent in the past year, compared with diversified groups such as BHP and Rio Tinto, offers a clue as to the value differential that has opened up.  Culpeo Minerals $CPO #drilling #discoveries #mines #equities Max Tuesley Sergio Uribe Valdés William Henry Quispe Garcia Yerko Lopez Bugueño Paul Schmiede SUSAN KERR Jesse D'Sylva Kaiden Gilbert Max Carter-Mazak Rob Hallam

GLOBAL COPPER DEMAND TO SURGE BY 75% BY 2050 Copper demand is projected to soar by 75%, reaching 56 million tonnes by 2050, according to a new report from data analytics firm Wood Mackenzie. This sharp increase will necessitate significant investment and strategic changes in the global supply chain, particularly as major economies seek to reduce reliance on China. Copper plays a critical role in electrification and decarbonization, making it indispensable for the global energy transition. However, China currently dominates the copper supply chain, including mining, downstream processing, and semi-manufacturing. As countries look to diversify supply chains away from…READ MORE HERE https://lnkd.in/dBiFNE3W

Was that the Copper Price Starter’s Gun? By Richard Dolamore   After nearly 2 years of waiting, the much-anticipated surge on the copper price may have started. Yesterday was one of the busiest days on the London Metal Exchange for copper on the news that 15 smelter plants in China discussed potential production cuts aimed at coping with a plunge in processing costs (treatment charges). The plunge has been driven by direction given by copper mining producers on output reductions, leaving smelters with not enough copper concentrate to smelt.   Copper is seen as the crucial mineral empowering the energy transition. The renewable energy sector is dependent on copper with demand anticipated to double by 2050. As the key ingredient in energy solutions that bring about net zero targets, the reliance on the EV market on this metal and with recent mining production challenges in South America, the anticipated race for copper supply may have started.   Hitting an 11-month high of almost $9,000/t, some analysts are even forecasting a market deficit in copper of up to 1 million tons this year.

After one of the world’s top copper producers recently hit a financial crunch, the Biden administration started huddling with potential investors about taking a stake in the company’s Zambian mines worth as much as $3 billion. The search isn’t restricted to American companies, with entities from the United Arab Emirates, Japan and Saudi Arabia—all viewed as friendly to U.S. interests—expressing interest in the stake in First Quantum Minerals’ FM 8.68%increase; green up pointing triangle assets, according to people familiar with the matter. The goal is simple: to keep it out of Chinese control and prevent the Asian superpower from tightening its grip over the global supply of crucial metals and minerals. The bidding, expected to be concluded later this year, is part of a global rush to acquire more copper, a key component in everything from electric cars to transmission lines and the data centers powering the AI revolution. The U.S. doesn’t have a ministry for mining, a sovereign wealth-fund or much of a domestic mining industry. That has put it at a disadvantage with China, which can direct its state-owned enterprises to invest heavily no matter how commodity prices are performing. A central part of the U.S. effort is the International Development Finance Corp., a federal agency that helps finance projects overseas. The agency agreed to invest $740 million last year in the mining sector, up from $245 million it had committed to legacy mining projects. Meanwhile, Chinese miners, with government backing, are rapidly snapping up assets. In Belt and Road countries, which don’t include Brazil or Australia, China spent more than $19 billion last year on metals and mining investments, up 158% from 2022, according to the Green Finance & Development Center at Fudan University in Shanghai. That is the highest level since 2013.  #energytransition #criticalminerals #criticalmetals #china #copper #supplychains #sovereignwealthfund #worldgameworkshop

Some thoughts on copper. Among the majors, I like $SCCO Southern Copper $2899.HK Zijin Mining and Hills $BHP.AX. Peru and Congo (DRC) are the two global jurisdictions that have runs on the board in new supply additions. Australia is a victim of NIMBY delays, brain-dead government industry policy, and a non-committal domestic capital market. Looks good on paper, but stuff all is really happening. At least Olympic Dam and Carrapateena are built. Outside of iron ore, for which there is no dispute that we should sell the stuff to China, every other minerals market is totally screwed. It may well be a case of "nothing to see here" for a decade, or more. People need to wake up.