Why Is Copper Suddenly So Valuable?

You've probably heard about stacking gold and silver, but what about this copper? It's cheap, it's useful, and it's suddenly exploding in price. So, why are people paying more attention to it? Welcome everyone. I'm Eric from Summit Metals, and today we're going to talk copper. Copper recently crossed $11,000 per ton. finally getting the attention it deserves. City projects 12,000 per ton by mid 2026 with a bullcase at $14,000 per ton. It's not hype. It's driven by tight supply and strong demand. Why does copper matter? Copper is literally the wiring of our modern world. Think your cars like EVs and all the electrical vehicles out there. Think of the AI data centers, the NVIDIA creating so much demand of processing power and things being connected. Renewable grids like green energy and of course infrastructure. The problem is that the supply simply cannot keep up. Mines take years to develop and current production is stretched thin. An example is the Grassburg mine in Indonesia. A mud flow knocked out 3% of glo global supply in September literally overnight that sent the price up fast and analysts immediately upgraded stocks that deal in copper like Freeport Macaran to an immediate buy. So we're talking about copper and let's break for just a minute. Let's show you some of the fun things that are out there. Let's start first with this 1oz round. This is a Buffalo round. It's a beautiful round. It's 1 ounce. Now, it's important when we talk about copper, there is a difference the way in the way we describe it from a weight perspective than we would, for example, with a precious metal. Precious metals, gold, silver, platinum, they're measured in ounces troy. An ounce troy is just a little bit more than an imperial ounce. And so, in this case, copper, however, is measured in actual ounces. This is a 1 oz round. This right here is a 1 oz tube. So, this has 20 rounds in it. They represent the perfect kind of mid-range option. They're still stackable, but they have that heft to them that make collectors want to keep them and hold them for a very long time. What's really fun, too, for us here in Utah is that we have a local angle to this. Right here in Utah, we've got the Kikott mine. It's the largest man-made excavation on Earth. It's so huge you can actually see it from the moon. In fact, if you're flying into Salt Lake, as you're coming in, if you look to your left, you'll see this huge hole in the ground, and that's the Kikakott mine. It's owned by Rio Tinto, which just invested 920 million to expand and go underground. That's not routine maintenance. That's a big bet on this copper and its future. All right, let's talk price. Copper is a little different because it's actually priced per ton. The current price is about $10,970 per ton or roughly 34 cents an ounce. City's base case is 12,000 a ton or 37 cents an ounce, but their bull case is all the way to 14,000 per ton or roughly 445 cents per ounce. That's a 30% potential gain translated into pounds, which is by the way the way traders quote it. Here's how it works. Today it's $4.98 a pound. The base case is $544 a pound. The bull case from city is $6.35 per pound. All right, now let's get back to why this actually makes sense. Let's understand this bull case. Global inventories, we've talked about they're dropping and they're dropping fast. We've talked about the fact that mine expansions are really slow. It takes years for someone to be able to create a mind and finally turn it into something that's productive. So it's not something as as we've seen the Nvidas of the world and AI just take off over the last year or two. The amount of connections happening inside these circuits, these CPUs and GPUs, all these different things is overwhelming these markets and as a result they can't keep up. Demand keeps climbing. We've seen what's happening with EVs. We know AI infrastructure, green energy, all these copper hungry sectors are just driving massive demand. And as we discussed, it's just not something they can respond to. We're trying to power an electrified world with limited resources. And one of the most limited as it relates to how much is required is this copper. Okay, we always like to balance things at Summit Metals. So, we want to give you the other side of the case and let's be real realistic about this. There are risk. The Grassburg mine we discussed, it will recover probably faster than we expect. We know the Fed is staying hawkish. Obviously, if copper goes out of control, it becomes inflationary for much of the economy. Think of how much wiring's in a home, cars, all these different things. China's demand goes up and down. Cooling right now. Permitting delays for new projects are are hard, but they're coming through. Any of these can stall the rally short term, but city's call takes all that into account and they believe this supply growth is anemic, meaning volatility cuts both ways. They believe that the demand for copper is going up. And so the big picture from their perspective is clear. Copper is not just another industrial metal right now. It's the quiet inflation hedge hiding in plain sight. And with Freeport upgraded, Riotinto doubling down on Kakott and long-term fundamentals lining up, this metal, this metal may end up being the next big trade most people overlook until it's already gone. So keep an eye on it globally through Freeport and locally right here in Utah through Kinnott because these copper runs, it doesn't walk. And this time, the ground under our feet is part of our story here in Utah. So, please take a look at copper. It's an incredibly affordable metal, something you can really treat as an entry into holding and saving and collecting. We know you out there, you love gold and silver, and so do we. This is another medal. It's a worthy medal. It's got a great story, and it's a great way to enter as I've discussed. So, thank you so much for joining. We love your comments. we read them all and we'll look forward to talking to you in the future. Happy stacking. [Music]