Will Copper Prices Continue to Rise?

All right, let's start with record copper prices. Do you believe they're justified by fundamentals, or are we seeing speculative excess in the market, and do you think these prices could lead to aluminum substitutions?

We do believe that the higher prices are being supported by the fundamentals. The durable long-term demand that we're seeing really calls for higher prices in our view. And we're seeing a lot of different banks and others in the commodity space are calling for higher long-term prices. What we're seeing is a huge expansion in the grid, and a lot of that has to do with what we're seeing from those AI data centers and ongoing electrification, whether it's through energy transition or electric vehicles.

This really calls for a lot of increased investment in the electrical infrastructure, and that's been a huge driver in demand for copper. We've also seen some supply disruptions over the last year at a lot of the major mine sites.

As it relates to substitution, I think there's this misconception in a lot of parts of the investing world that it's pretty easy to switch from copper to aluminum. There's a lot that goes into that. While they're both conductive metals and there can be some substitution there, it's not as easy as flipping a switch. You're talking about changes to the industrial complex, setting up new machinery. Typically, when you have aluminum wiring, it has to be much wider than what you would see out of copper wiring just because it's not as conductive.

A lot would have to happen in aluminum, and I think in order to see significant threat of substitution, you would have to see persistently high prices over a long period of time.