While all metals could play a role in supporting our post-pandemic economy, the demand for copper may beat all other commodities when near-term demand is assessed compared to available supply.
Copper is used in electrical wiring, appliances and plumbing for the construction boom as city dwellers rush to suburbs and rural areas.
Our auto fleet is quickly converting from reliance on fossil fuels to electricity, creating another new demand for copper. The power to “fuel” our electric cars and everything else will be coming from renewable sources, primarily solar farms, which also use copper. Of course, copper mines are being constructed in South America and Africa, so a new supply should eventually answer the demand.
The high speed at which our economy is recovering from the pandemic should put the wind at our backs as there is more demand for cars, houses and solar farms. The U.S. economy grew by 1.6% in the first quarter, a 6.4% annual rate, on its way to returning to pre-pandemic levels by the summer.
Gold, platinum, lithium, nickel and, especially, silver could emerge as favorites as new technologies are developed, but for now copper shines above the others.
This week, July platinum was at $1,206, down about $30 per ounce; June gold was at $1,771; and July silver was at $26. Gold and silver were virtually unchanged on the week. A pound of copper, on the other hand, jumped up to $4.47 for July delivery.
Biden announces plan for family farms
In his joint address to Congress, President Biden described a $1.8 trillion investment in his American Family Plan, which included assistance for nutrition, education and childcare. The plan would be paid for with increases in capital gains and taxes on the most wealthy, but family owned farms would be protected as long as the farm remains in the family.
Drought creeps toward Corn Belt
Weather forecasts toward the week’s end included a much-needed drink for some of the U.S.’s wheat and corn belts. But farmers, speculators and end-users continue to watch the longer-term growing regions, mainly in the southwest, which is experiencing a drought.
Corn for July delivery was up $6.70 per bushel this week, July wheat $7.30 and July soybeans $15.28.
Walt Breitinger is a commodity futures broker in Valparaiso. He can be reached at (800) 411-3888 or www.paragoninvestments.com. This is not a solicitation of any order to buy or sell any market.