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The Big Take

A Great Copper Squeeze Is Coming for the Global Economy

The recent downturn for copper prices only stands to worsen a coming deficit as the slump discourages new investments for the metal used in EVs and power grids.

Molten copper at a smelter facility in Ilo, Peru.

Molten copper at a smelter facility in Ilo, Peru.

Photographer: Dado Galdieri/Bloomberg

The price of copper — used in everything from computer chips and toasters to power systems and air conditioners — has fallen by nearly a third since March. Investors are selling on fears that a global recession will stunt demand for a metal that's synonymous with growth and expansion.

You wouldn't know it from looking at the market today, but some of the largest miners and metals traders are warning that in just a couple of years' time, a massive shortfall will emerge for the world's most critical metal — one that could itself hold back global growth, stoke inflation by raising manufacturing costs and throw global climate goals off course. The recent downturn and the under-investment that ensues only threatens to make it worse.