- Copper prices are set to rise over the next five or six years as demand outpaces supply.
- Billionaire investor Stanley Druckenmiller says demand from EVs, data centers, and even missiles are a boon for copper.
- Druckenmiller initiated a new position in copper miner Freeport-McMoRan in the fourth quarter.
The price of copper will hit new record highs over the next five to six years, according to billionaire investor Stanley Druckenmiller.
Druckenmiller told CNBC earlier this week that strong demand for copper from various growth industries — combined with supply imbalances due to the decade-plus lead time it takes to produce the metal from new mining operations — should push the price of copper higher over the next few years.
"Copper is a pretty simple story, takes about 12 years, greenfield to produce copper, and you got EVs, the grid, data centers, and believe it or not munitions. These missiles all got enough copper in them and the world's getting hot that we just think the supply-demand situation is incredible for the next five or six years," Druckenmiller said in the CNBC interview.
Growing demand for copper from defense industries appears especially timely given the $95 billion military aid package the US recently approved for Ukraine, Israel, and Taiwan.
Copper prices are already pushing up against record highs. The commodity is up about 18% year-to-date, trading at $4.68 per pound, which is just slightly below its all-time high of $5.04 reached in March 2022.
This isn't the first time Druckenmiller has called out copper as a potential investment opportunity.
At the 2023 Sohn Investment Conference, Druckenmiller said copper was "in the tightest position, well frankly I've ever studied."
"Given the move toward EVs, given the usefulness of it in infrastructure spending, it's hard to believe copper won't be a huge beneficiary. The question is when am I supposed to buy it and how big is the exposure?" Druckenmiller said.
But due to concerns about a potential hard landing in the economy at the time, Druckenmiller was not yet ready to initiate a position in copper.
Druckenmiller's thinking has since changed, with his fourth-quarter 13F filing revealing that his family office initiated a $20 million position in copper miner Freeport-McMoRan. Druckenmiller's first-quarter 13F filing, set to be released next week, will reveal whether he's gotten even more bullish on copper since then.