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Speaker 1: Welcome to Fear and Greed Q and A, where we

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Speaker 1: ask and answer questions about business, investing, economics, politics and more.

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Speaker 1: I'm Michael Thompson, and good morning Sean Ailma.

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Speaker 2: Good morning Michael.

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Speaker 1: Sean. Nothing says Sunday Morning like copper. So today today

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Speaker 1: I want to ask you about copper because there's been

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Speaker 1: rises and falls in commodity prices and it's depending on

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Speaker 1: and we've seen this playing out this week, depending on

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Speaker 1: what's happening in China, and that's impacted local mining stocks.

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Speaker 1: There's been a big merger this week between Anglo American

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Speaker 1: and tech resources out of Canada. We keep hearing right

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Speaker 1: that copper is the benchmark commodity. Why and also, if

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Speaker 1: I may ask you a follow up question before we've

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Speaker 1: even had a chance to answer the first one, wasn't

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Speaker 1: it the benchmark before electrification as well? So why is

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Speaker 1: it now being held up as the new benchmark?

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Speaker 2: Yes? Well, see this is why it should be a

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Speaker 2: Sunday Morning topic because copper is hot, hot copper. There

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Speaker 2: you go, It is one of the great commodities. Now

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Speaker 2: the two parts, I mean, the question has two parts.

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Speaker 2: Why was copper the benchmark before electrification? And why is

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Speaker 2: it still the benchmark after electrification? Why not some other

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Speaker 2: battery metal thing? Fair enough in a nutshell, Michael, when

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Speaker 2: demand for copper increases, it typically indicates a growing economy.

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Speaker 2: Decreasing copper demand basically means things aren't going so well.

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Speaker 2: So that's why we see it as a bellweather or

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Speaker 2: benchmark in terms of commodities. Looking underneath that, what do

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Speaker 2: we use copper for? Well, electrification, But let's just think

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Speaker 2: before then. It's the third most used metal globally. It's

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Speaker 2: used for all sorts of things that came along well

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Speaker 2: before climate change debate hit the headlines. You know, home appliances, transportation,

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Speaker 2: obvious electronics, building construction, it's got medical uses. They's been

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Speaker 2: around for centuries, well before we've been talking about electrification.

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Speaker 2: In fact, copper Michael, this is really exciting. It dates

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Speaker 2: back as far as eight thousand years ago. Oh wow,

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Speaker 2: it seems to have first been used to mold into products. Obviously, well,

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Speaker 2: how we use copper, copper sheets or whatever nowadays is

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Speaker 2: far different. But that's when it appears that copper was

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Speaker 2: first years. Why they liked it back then and why

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Speaker 2: we still like it now. Mostly it's malleability and softness

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Speaker 2: really simple to shift around.

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Speaker 1: What I am. I am enjoying your passion for copper.

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Speaker 1: I've never encountered a copper of evangelist before you've got one.

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Speaker 2: Oh, So it's malleable, it's soft, it's great thermal conductivity.

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Speaker 2: It resists corrosion better than most metals.

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Speaker 1: Is there anything that copper can't you do?

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Speaker 2: It'll make your breakfast in bed if you ask it nicely.

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Speaker 2: I don't doubt that. So it's always been the benchmark.

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Speaker 2: Now nowadays, about three quarters of global copper consumption is

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Speaker 2: in electronic products and particularly electric vehicles. That's where it's

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Speaker 2: really taken off. It's writing the green energy boom. Think

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Speaker 2: when turbines, grid infrastructure. The thing that's hit in more

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Speaker 2: recent times in the last couple of years, which makes

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Speaker 2: companies like BHP, Rio, Tinto, Anglo American and Tech really

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Speaker 2: one copper is that it's now writing two new mega trends,

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Speaker 2: the rise in military spending and artificial intelligence. So it's

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Speaker 2: needed in all these data centers in an artificial intelligence.

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Speaker 2: With that boom, there is no way that copper output

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Speaker 2: can keep up with demand, particularly when you're adding the

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Speaker 2: military spending. Now, why is it part of the AI boom?

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Speaker 2: Because AI needs huge amounts of electricity to work, and

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Speaker 2: that's where copper finds its way into the AI boom.

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Speaker 2: So a single AI data center can use as much

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Speaker 2: electricity in a year as hundreds of thousands of electric cars.

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Speaker 2: Now you need copper to conduct that. Therefore, that's why

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Speaker 2: there's so much demand for it at the moment. In fact,

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Speaker 2: over the next decade, data centers will require more than

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Speaker 2: four point three million metric tons of the metal, according

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Speaker 2: to research firm bloom Bloomberg and ne Ef. How much

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Speaker 2: that's about four point three million metric tons. That's about

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Speaker 2: a year's supply from Chile, which is the world's top supplier.

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Speaker 1: Well, I was about to ask you, right, there is

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Speaker 1: so much demand for this, right, and I was curious

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Speaker 1: about just how plentiful it is, like whether there is

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Speaker 1: actually so I know, I know it's hardly considered rare,

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Speaker 1: but just how much there actually is? And so I

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Speaker 1: was just doing a little bit of googling, right, because

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Speaker 1: you have infected me with your enthusiasm for court like

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Speaker 1: and current global reserves, right, eight hundred and seventy million tons,

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Speaker 1: eight hundred and seventy million tons, and that reserves are

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Speaker 1: just a deposits that have already been discovered, already been evaluated,

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Speaker 1: and are assessed to be profitable. This is according to

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Speaker 1: the International Copper Association. So you can assume that that's

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Speaker 1: eight hundred and seventy million tons. There would be multiples

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Speaker 1: of that you would imagine still waiting to be discovered, evaluated,

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Speaker 1: and potentially mined in the future. As I know, I'm

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Speaker 1: only new to the copper game, Sean, but.

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Speaker 2: Heck, this stuff you still got to get it out

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Speaker 2: of the ground. That's a tricky bit.

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Speaker 1: Yeah, yeah, that's true. I mean it's a bit more

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Speaker 1: than just a pick and a shovel, slightly bigger operation

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Speaker 1: than that, right, But yeah.

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Speaker 2: The point is that copper used to be and even

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Speaker 2: more so now tells you about the health of the

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Speaker 2: economic outlook, and that is kind of the bottom line

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Speaker 2: in it. And the fact that you know, you need

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Speaker 2: copper for these data centers, you need copper for defense bending,

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Speaker 2: which are two big mega trends. Plus you need it

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Speaker 2: for all the other stuff that you've already had, you know,

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Speaker 2: from evs through to building materials and medical supplies and

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Speaker 2: stuff like that it is the hottest commodity and probably

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Speaker 2: will be for a long a long time, and there's

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Speaker 2: just not enough of it. And so I think it

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Speaker 2: was a Wall Street Journal had this table and it

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Speaker 2: just showed the next decade, the undersupply of copper is

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Speaker 2: quite incredible, and so you have to expect to see

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Speaker 2: prices go up because you've got high demand, low supply.

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Speaker 2: That's what happens.

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Speaker 1: Oh, this could be the worst suggestion I've ever made,

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Speaker 1: but I have found this so fascinating that I'm almost

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Speaker 1: tempted that every Sunday we dig into another commodity. Did

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Speaker 1: you like that one?

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Speaker 2: Let's not. Yeah, I like it, but we're not doing that. Oh,

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Speaker 2: but that'd be fun.

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Speaker 1: Like next week we could be doing platinum, and the

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Speaker 1: week after that it's plutonium.

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Speaker 2: Silver is an interesting one.

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Speaker 1: It really is, actually, isn't it? And it is funny

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Speaker 1: the way the gold price and the silver price kind

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Speaker 1: of rise almost in tandem, yet they are so so

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Speaker 1: far apart, the two of them. It is really interesting.

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Speaker 2: Anyway, do you know what I really like one of

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Speaker 2: my favorite rare earths, because rare earths are totally profligate.

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Speaker 2: They're everywhere. Rare earths like nothing to do with a knife.

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Speaker 1: You know, I think us out a highlight there right

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Speaker 1: at the very end of your use of the term profligate.

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Speaker 2: Good point in terms of commodities. Don't think makes sense.

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Speaker 1: Oh golly, I enjoyed that, all right, Sean. Look, if

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Speaker 1: you're listening to this and go, you know what, I

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Speaker 1: would love to hear a special commodity Sunday. And there's

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Speaker 1: a particular commodity that you would like us to get

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Speaker 1: into that you've just been just really itching to know

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Speaker 1: about them. Please send it on through. Go to the

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Speaker 1: website Fearangreed dot com dot au or LinkedIn or Instagram

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Speaker 1: or Facebook. Tell us your favorite commodity and we will

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Speaker 1: we will tackle that one too. We go, Thanks Sean.

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Speaker 2: Thanks Michael.

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Speaker 1: I'm Michael Thompson and this is Fear and Greed Q

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Speaker 1: and a