Odd Lots - Why Copper May Be One of the Tightest Markets The World Has Ever Seen

Episode Date: May 30, 2022

These days, oil gets all the attention. Consumers feel and see the pinch directly every time they fill up their gas tank. But the big story in the next decade could be copper. It's not easy to ramp up copper production, due to the upfront cost and lead time in getting new mines online, and demand is expected to soar in part due to green initiatives. On this episode we speak with Goldman Sachs metals strategist Nick Snowdon about why the copper market is expected to be incredibly tight.See omnystudio.com/listener for privacy information.

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Music for more future episodes or just ask Alexa play the Odd Lots podcast on Amazon Music. Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Wisenthal. And I'm Tracy Allaway. Tracy, I feel like a lot of our best episodes are often based on something in a previous episode. And we're like, oh, that sounds interesting. Like, you know, we did the dredging episode because of something that we learned about when we were talking about why your luggage was stuck or why your goods were stuck. Yes, that's exactly right.

And this is a similar episode, isn't it? We heard something interesting, and it came from the commodity space, and we've decided that we need to dig in a bit further. Right. So earlier in the year, a couple months ago, I recall, we were having a chat with Jeff Curry, who is the top commodity strategist at Goldman Sachs. And, of course, the overall topic was just like this tremendous commodity inflation that has been like a story of much of 2021 and 2022. and a lot of the focus has been oil and a lot of the focus has been food. But then he also said that copper specifically might be one of the tightest commodity markets that we've ever seen in history. Yeah, which is kind of surprising because, I mean, A, you just don't hear copper talked about as much as something like oil and gas. But B, if you look at the price chart of copper, it's been coming down in recent months, mostly because of, you know, concerns over China's economic growth and the lockdown.

and things like that. But it's not necessarily a market that is screaming structural underinvestment and supply tightness. Right. I think there's sort of like this long-term story because the increases in demand for copper are expected to be very high. Unlike oil, it takes a really long time to get new production online. It's not like you're just like put a new rig out somewhere in Texas and the Dakotas and start pumping. So there's a lot of demand. for copper. And although the prices are done recently, it's still up a lot since pre-crisis overall. So it's still like a tight thing. But I think structurally long-term, apparently it seems like it's going to be a tough market. Well, this is what I'm trying to get at perhaps inelegantly.

But it's copper is something that we don't talk about that much. But if you look at it, if you look at the long-term dynamics, it seems to have some resemblance to what we've seen with oil and gas. So big booms and busts that kind of lead to structural underinvestment or under exploration and unwillingness to expand minds also because of environmental concerns. And then the reason that's so interesting is because if you look at what's going on with the attempts to electrify everything, attempts to bring down emissions and things like that, well, you're going to need electric wires for that. And so copper becomes a really important strategic commodity that is nevertheless kind of underlooked at the moment. Yeah, totally. So the line that Jeff used in our podcast, he said, I would argue copper is likely to be the tightest

commodity will have ever seen. It's much tighter than what oil was did during the 2000. Let me remind you, oil went up 7X in the 2000s. And, you know, our forecast is 15,000 a ton on copper. But no matter what technology you use, you're going to. be using electricity. And the only thing that can conduct electricity, given the rules around the periodic table and the rules of chemistry, is copper at the rate we need to conduct it. So it's like, all right, we got to follow up. And so we are going to follow up on copper with

a fellow, a colleague of Jeffs at Goldman Sachs. We are going to be talking to Nick Snowden, who runs metals research at Goldman Sachs, and he'll explain that line and what we should be watching for with copper. So Nick, thank you so much for coming. on odd lots. Absolutely. A pleasure to be on with you, but. What does that mean? When we talk about a tight commodity market, how do you define that?

Well, I mean, I think when we look at the outlook for the copper market, you know, over the course of the next three, five, ten years, what we see are essentially impossibly large deficits developing over that time frame. By the middle of this decade, we're forecasting. the largest ever deficit in the copper market, so just two years away from now. And by the end of the decade, the largest ever long-term deficit. So I think what that's telling us relative to the starting point already of very low inventories, is that this market has such severe imbalances that they're not kind of resolvable at current price levels.

And I think that's the crux of the issue in the copper market. It's just an impossibly tight future at today's price. There's no fundamental adjustment underway that can meaningfully solve what lies ahead. So can you dig into that a little bit further? Because, you know, I mentioned the price action in copper recently. It is up a lot over the past year or two, but it has been coming down. And so I guess my question is, what is it that you guys are? seeing that the market isn't currently seeing? And what is responsible for the looming supply

imbalance that you just mentioned? Yeah, sure. I mean, I think there's a kind of a horizon difference there. I think in the near term, you know, commodity markets are ultimately driven by spot fundamentals. And, you know, in the current kind of environment, we are seeing a weakness in in Chinese demand due to the COVID lockdowns that has generated some softening effect on the market. On top of that, we are seeing slightly stronger exports of copper out of Russia than was expected when you went back to the beginning of the invasion. So that's creating a bit of softness in the market, and that has certainly weighed on price.

But those are short-term transitory issues in the copper market. When we talk about the structural bull market in copper, that's underpinned ultimately by two key factors. One, there's essentially no decarbonization without copper. It's an absolutely integral raw material for the key green technologies, EVs, EV charging infrastructure, renewables. And I think we see the demand impact from decarbonization efforts over the course of this. decade generating as much of an uplift, a copper demand, as China did in the 2000. So it absolutely immense. But at the same time, that's coming up against an environment where we hit peak copper

supply within the next two years. And there's a complete absence of fresh investment coming into the sector. And so after that peak, supply is trending into an open-ended contraction. So you have this clear tightening tension between this boom in demand tied to the green transition and really a complete lack of growth coming from the supply side. Let's talk more about the demand side. So in 2022, right now, how many tons of copper does the world use, I don't know, in a day or a year or whatever, however you like to measure it? And what is the sort of industry or usage breakdown?

And then what do you see as A, that number, the total volume demanded in the year 2030, and what will be the segmentation of where that demand is coming from? Yeah, sure. So, I mean, if you look at the global cop market today, demand in 2022 will come in at around 24 million tons. Okay. So, you know, the way we look at that demand breakdown, I think this is that, you know, in the context of placing the green transition is, you know, green versus non-green demand. Today, the world is dominated by non-green demand.

That's copper going into construction, wiring in your house, wiring in electronics, in cars, in the grid. That, out of that, 24 million tons this year will make up about 22 and a half. million tons. So absolutely dominant driver of global copper demand today and green demand, which we categorize as electric vehicles, electric vehicle charging infrastructure and then the green power sector, so wind and solar, that only amounts to about one and a half million tons of copper demand today. But if you look at what's going to play out over the next five, ten years, that balance between green and non-green demand is going to switch quite quite sharply. By 2025, green demand will have doubled, gone to closer to 3 million tons, and by the end of the

decade, that that number will have risen to between 6 to 7 million tons. So green demand will go from today being only about 5% of the global demand to closer to 20%. So an immense uplift And I think Key is it's already starting to play out. You know, we're already seeing incredible growth in the EB sector, particularly in China. You know, the growth rates there are spectacular, you know, near doubling in market size, you know, well beyond, you know, any expectation if you went back to the beginning of this year or next year. But also in Europe as well. And we're also starting to see really aggressive growth in green infrastructure.

And that's not just China, that that's Europe as well. So, you know, it's no longer theoretical demand. Even though it's a small part of the market, it's growing at a very rapid rate. And that rate is going to accelerate over the course of the next few years. So I think I'm going to ask the same question, but just from the supply perspective. Yeah, good. So where does copper come from? Or maybe a better question is, how hard is it to get coffee?

Because I think copper, I think, you know, big mines that are bringing out new supply. But I also remember back in 2008, 2009, when we also had very high copper prices, there are all these stories about people stealing scrap metal in order to get bits of copper and sell them for loads of money. So how difficult is it to actually source and what does the supply path actually look like for the next few years? Yeah. So, I mean, I think the first point to make is that there isn't a shortage of copper in the earth's

crust that, you know, there are a lot of potential minable options out there, but we're just not seeing capital flowing into those projects. Yeah, and I think it's very different to what we saw in the 2000s, because in 2002, when that kind of respective bull market began, almost immediately you saw the supply side respond. You saw projects been approved and investment flowing rapidly. and the supply side really, you know, almost moved in lockstep with the increase in price. This time round, that isn't occurring at all.

You know, over the last two years, even though the copper price has doubled, there hasn't been a single new copper mine approved. Wow. So it's a startling difference. And I think, yeah, the reasons for that are similar to some of the issues facing broader commodity extraction industries. But I think the number one constraint on the copper mining. industry, you know, is the experience of the last cycle.

Because, you know, the mining industry faced a near-death experience in, in 2013, 2014, as a result of the overbuild in response to, you know, to high prices in, in, in the mid-late 2000s. And I think now you have, you know, a much more conservative mentality amongst management teams in the mining sector, reflecting that at that. experience. And so that conservatism, you know, is very difficult to erode and it's certainly still firmly in place. Look, I think it's not just that, though, also. I think, you know, what's different now to 20 years ago is also, you know, we have the ESG influence on investor allocation, but also at a micro level. So less capital has flown into commodity sectors because they haven't

screened well through the ESG filter, but also at a micro level, at a mining level, if you want to build a copper mine today, even before you break ground, you will spend two to three years waiting to get the right permits to actually move forward with construction. 20 years ago, that same process took six, maybe 12 months maximum. So much, much higher hurdles from an environmental and social perspective. Is this a global phenomenon that everywhere around the world? Because, look, I'm not particularly surprised that say in certain developed markets that people, that there's been a big change in terms of the environmental expectations and the permitting process. But is this like

a global phenomenon? Because I didn't, I don't know, you know, I think about the US in particular, or maybe Europe, but has everywhere in the world essentially gotten more stringent about these things? Yeah, I mean, look, one of the hardest places in the world to get a copper project going today is Chile. And Chile is the Saudi Arabia of the copper market. And that is one of the places where the permitting process has kind of more than tripled in length. So it is incredibly difficult. But I think the other problem is that young people have not been going into the mining sector for the last decade. They've been going into, you know, tech or, you know,

So what that means is you've got a real bottleneck now on skilled labor in the industry. There aren't enough engineers to support a project if you want to get it off the ground. So there's practical bottlenecks, there's ESG bottlenecks, and there's just conservatism around spending money. And on top of that, investors are getting a great cash return story from the mining sector, very, very high free cash flow yield, and they're not demanding growth from the sector either. So, you know, we're first innings in terms of the supply response for copper, certainly. Tracy, it's just so fascinating how so many of these stories keep aligning of like having to unlearn the lessons essentially of the last decade in order to make any better.

Yeah, we internalize trauma from the last cycle and now we're very careful about fueling the next boom-bust cycle. the meantime, you get this underinvestment and higher prices, but they don't seem to do very much. One thing I'm wondering is, let's assume that everything stays pretty much as it is. Environmental regulations stay put because people do care about the climate and there are concerns about digging stuff out of the earth. There's continued underinvestment for various reasons. How fungible is copper? Like, what are the alternatives that could be used when it comes to something like electrifying a car or something like that? Well, I think one thing we've got to

recognize about copper is that it is not a raw material where it has close competitors in its key role as a conductor. Because it's such a good conductor that it really has a primacy over its key roles in the grid, in cars. Now, that's not to say there aren't other. potential conductors, but things like aluminium, you know, require a lot more aluminium to achieve the same level of conductivity as copper. And so it's just not practical for uses where you have a small amount of space. And so, really, there isn't a competitor for copper for, you know, for the majority of its key roles.

That's not to say that there couldn't be some substitution towards other raw materials in kind of less space confined use. I think aluminium is top of that list. But look, if you look at the aluminium market right now, that's facing its own story of underinvestment on the supply side and also is levered to the green transition. And that's reflected in the very rapid run-up in aluminium price that we've seen over the last 18 months.

So the most obvious potential substitute is also facing near record pricing. And so it's not, you know, an attractive kind of substitution choice. So, I mean, I think the answer to you would be there isn't really an obvious sort of raw material that can step in. Now, look, necessity is the mother invention. And, you know, if copper prices go to the levels that we expect, if not higher, then will that incentivize much greater efforts in terms of trying to find alternatives, or perhaps more reasonably kind of dilution of the level of copper used in some of these areas. And that could well play out not just in non-green uses, but also new areas.

So you may well see slightly less copper used in an EV in five, ten years time, partly because of the high prices and just partly because it's technology that's new, that's developing and over time they'll find efficiencies. I think that's probably more of the demand effect you'll see than, you know, kind of a material step away from copper to another raw material. You said something that I want to go back to because it seems extremely important and it's not something, I don't know if any other guests have really talked about it, which is the talent crunch. So it's like, okay, we understand there's the cash shortfall, the reluctance to invest and the underinvestment and so forth.

the sort of ESG environmental considerations. But of course, we just had this decade, right, where if you are a talented person, and you wanted to make money and have a booming career, you probably went into software or there was a really good thing like that. Can you, or something like that, can you talk more about this idea of the talent shortage of like what happens when sort of like the best and the brightest don't want to work in extractive industries? Well, I mean, I think the most obvious impact is that you just have. have a shortage of labor to drive supply adjustments. There literally are a handful of teams

recognize around the world who are good at building and growing production at copper mines. Now that reflects the lack of new entrance into the mining market, but I think that really just limits the pace at which you can undertake new projects. So even if you decide today, you know, we are going to spend several billion on a new copper mine, you're still going to struggle to find the engineering team to support that.

So I think that's a bottleneck and a further delay on response. But of course, the other aspect is that, you know, you probably can find the right team, but you're going to have to pay top dollar to get them. And so that then feeds into this risk of capital cost escalation. which is exactly what we saw back in the 2000s. Prices of inputs into projects, labor, machinery, fuel, you know, we're all rising rapidly.

And so initial capital costs for projects ended up being far too low versus where they ended up. And I think that's a very real risk that we're facing in the mining sector today. And on top of that, it means costs are just rising. So the cost curve in the copper mining industry and in many other matters, is inflating, and the top end of the cost curve, the most expensive mines in the world to operate, is now within touching distance of today's copper price. So, I mean, that's actually important for supporting where prices are, but it doesn't

solve anything in terms of the structural imbalances in this market. It just makes that more expensive to solve and ultimately supports the idea that we need much, much higher prices than we have today. So just on the existing, I guess sort of one and a half questions, but what does the supply outlook look like for the existing set of copper mines that are in production? Like how much are they going to fade in terms of how much more can be pulled out of them? And at what point will we see the dam break, so to speak, where these high prices and this

high demand actually does induce someone somewhere to get, break ground on it? new mind. Like, when's that going to happen? Yeah. So I think if you look at current production, what we have over the next 12 months is a kind of final spurt of growth set to come through. And then we hit peak production at the end of 23 in the beginning quarter of 2024. So there is a little bit of growth. That's from a small number of projects in Chile, Peru, and and in the copper belt in Africa. But then after that, we essentially flatline, and then on the current guidance from producers,

we'll start to enter a phase of open-ended contraction of around 1% a year from 2025 onwards. So, I mean, that's pretty set in stone. Look, I think, you know, in terms of, you know, what's the kind of point that, that kind of changes that, you know, I think it really has to be price. But I think it also has to be a realization that, you know, copper is this absolutely key raw material for the green transition and is going to be a hurdle, a bottleneck on the planned

pace of decarbonization. We're just not going to have enough copper around to support the necessary growth in green technologies on the current roadmap. So I think that means price has to be absolutely key, but I think it also has to be a function of policymakers, governments

grasping that fact, and perhaps easing the ability to grow production. So I think it's a confluence of factors, but absolutely number one, it has to be much, much higher prices because today's price is not going to moving the needle

of all in terms of producers, you know, interest in investment. So one thing we've seen recently with certain commodities that might be in immediately tighter markets are the actual customer of these commodities trying to secure their own supply. So for instance, Tesla signing deals in order to get stuff. like nickel from specific suppliers. Is that something that you would expect to happen with copper, that sort of vertical integration or end users actually trying to strike deals to source their own supply?

I think it's perfectly possible because I think the issues that copper faces right now is far more extreme than some of the battery raw materials where you've seen that proposed. You know, I think we're not in as acute a stage of shortage today as some of those other metals. And so it's not as front and center in terms of potential strategy. But I think in two, three years time, given how tight, you know, things are going to get, we will be hearing very, very similar conversations around COPPA. Now, that's absolutely too late. Those conversations need to be happening today. And if the miners are not willing to start to invest,

then it should be these key downstream consumers who are pushing that. So I think, yes, absolutely. I think that will have to happen. But it will probably happen too late. And as a result, prices are going to go absolutely ballistic to the upside. And the downstream will suffer because of the current sort of intransigence.

in terms of supply investment. What are the environmental costs of mining? I mean, obviously, I assume the people who, the countries and governments that are reluctant to rapidly approve new mines, have legitimate concerns about the environmental risks. What are they? And then specifically, like, how much do we all have to become Chilean political experts now to understand what's going to be happening in the coming years? No, I think from a mining perspective, you know, I think the,

mining sector has actually been very good at reacting to the new kind of ESG standards on operations. So, you know, I think, you know, there's no kind of challenge for the, for the mining sector in terms of respecting new rules, you know, respecting nature, kind of water supply. Yeah, like what is like mining due to the water supply? Or what have we seen in terms of the environmental cost? It's not so much that it does anything to water supply. the mining sector is a relatively intensive user of water. And so if you have a mine up in the mountains and the Andes and local communities around there,

then governments want water to flow to local communities. And so there's no questioning of that at all. But I think what it means is that the miners have then had to invest in essentially pumping seawater up from, up to the operations and desalienization plants. So what does that mean? Well, it just means additional costs and time in terms of getting the mines up to the kind of level of operation they need.

Now, on top of that, in some regions, you've had pretty bad drought, and certainly that's been an issue in Chile, an ongoing issue in Chile for the last few years. And mining is a very water-dependent process. The more water you have, the higher the throughput of the kind of ore through the system and the yields you get on that. I'm sorry, what is the water? I don't know much about mining engineer.

What is the main use? Well, you essentially have to kind of wash the material that's coming out of the ground. So it's a kind of a cleansing process. And so, you know, the lower the flow of water through that, the kind of lower the kind of essentially the yield. So it is key. But mining companies are resolving that, but it, you know, it adds cost to the system. So, look, I think there's no doubt the mining sector, particularly the copper mining sector, has been successful at adapting to, you know, ESG hurdles.

And I think, if anything, held itself to very high standards before, you know, that became a kind of official mantra. But, you know, that comes with additional cost and time in, in terms of getting projects up to speed. So what's the bare case for copper here? And the reason I ask is because I saw an article on the Institute of Electrical and Electronics Engineers, which obviously I read very religiously. And the article was called Practical Power Beaming Gets Real.

And this was like Nikola Tesla's dream, right? That instead of using wires or some type of physical conductor to transmit energy, you could actually do it in a different way, like a bolt of lightning that goes from one thing to another, that sort of thing. And I mean, I wonder, is that the ultimate bare case for copper that we develop some sort of new technology that means you actually don't have to conduct through wires? Well, yeah, I mean, I think there are two things that could transform the story. The first would be if we get a production technology shift. So we've seen that play out in other commodity markets over the last 20 years. The most obvious is oil and shale in the US.

Is there any evidence of that type of production technology shift occurring in copper? The answer would be no. There's some developments at the margin around achieving higher return from tailings deposits, which is the waste that mines. generate during the production process. Typically, those tailing deposits are kind of left on the side, but there is some technology being developed that can actually achieve quite a high return on the copper within those.

But that's really a marginal production game. There's certainly nothing along the lines of shale. And I think even if there was, if you look at the history of production technology in the mining sector, it's incredibly slow to adapt. So in copper back in the 1980s, there was a new production process called SXEW that actually became quite a meaningful influence on production, but not until the end of the 1990s and into the 2010.

So it took over a decade for that technology to scale up and have mass adoption. So there's nothing on that line. you know, in our line aside. And even then, I think it would be very slow. So that's not a solver, at least in the 2020s. And then, you know, on the demand side, there isn't an obvious raw material competitive substitute.

You can't rule that out. There's clearly a lot of work being done on these kind of alternatives. But we just don't see that happening. And I think that's why when we look at the story, that just isn't the mine supply response coming through in time to meaningfully kind of lower the deficits in this market. So mine supply in our view is not going to be the solver.

And then so what are we left with? Well, you know, really what you're left is demand destruction. Right. And I think this is why we have such a bullish target on copper because to achieve demand destruction and demand destruction in copper, it is much, much harder than in agricultural or energy products. And the reason for that is that the end consumer in the goods that they consume that have copper,

copper is really a very small part of the cost of that good, the price of the good that they face. So for the copper price to drive demand destruction in cars, in electronics, you're going to have to see a massive outsized move in the copper price to achieve the necessary increase in the cost of the total good to drive that demand destruction. It's very different to energy and agricultural commodities where you're really nearly majority exposed to the oil price or the wheat price with the food on your table. It just doesn't work their way in metals.

This is really fascinating. I hadn't thought about that. So copper is absolutely crucial to EVs, but it's not so big of a factor. and the price of an EB that it's actually going to change anyone's plans to build or buy one until you just get run up. But, you know, we just have like a couple minutes left here. So we're at, you know, in London, I think the LMEE price is right around $9,300 a ton for the price of copper. What are the scenarios? Where it could go? I think I've seen $15,000, but what are the scenarios? And then if we were to get some sort of demand destruction, like are there any use cases at that price,

that it becomes economical and they'd have to drop off. Oh, sorry. Well, I think, yeah, I mean, the reason we see prices going to $15,000 are, you know, one, we're already in a very tight market. The COVID fiscal stimulus effects of the last two years have generated incredibly large deficits in many metals, copper included. And so we start really this kind of green supply crunch story already with very, very very low inventories in the system.

But then the next leg higher is ultimately going to be a reflection of that progressive green supply crunch essentially removing the remaining inventory from the system over the next three years. And then the market having to go to incredibly high price levels to generate that end demand destruction. The thing about the copper market is that we've never been in such an extreme set of fundamental circumstances. We've never had to go to end demand destruction pricing to achieve a rebalancing.

The bull market of the 2000s was nearly entirely solved by supply responses and that very rapid increase in mine investment. That's clearly not going to be the majority solver this time. So when we say 15,000, what we're saying there is copper is going to have to go to a price level well beyond any level we've seen before historically to achieve that demand structure. Could 15,000 prove conservative, absolutely? And the reason why I say that, look at oil in the 2000s. Oil started that decade, you know, trading $10, $20 a barrel and ended the decade,

trading, you know, $140, $150 a barrel. So, you know, a sevenfold increase in price to adjust the market enough to solve. imbalances that all faced in 2000 that were very similar to what the copper market faces today. So we don't rule out that copper could be a $50,000, could be a $100,000 commodity. And there are plenty of commodities that have achieved that. Look at lithium. You know, lithium is trading five times above, six times above the cost curve today. This does happen in commodity markets when you face such extreme fundamental imbalances.

And price, you know, has to go to such extremes. to solve that setup. Well, Nick, this was absolutely fascinating. We could talk to you for a long time. We've got to have you back on again at some point. But I learned a lot. Really appreciate you coming on odd lots. And I will be paying close attention to copper

over the next decade for sure because that was very eye on. Pleasure. Thanks for having me. Thanks, Nick. Thanks so much, Nick. Yeah, that was fantastic. Oh, Tracy, $100,000 copper. Do you hear that?

50,000? Yeah, and I'm looking at the price chart of lithium to his point, and like 500%. Yeah, it is not unheard of. The one thing that struck me in that conversation, and you picked up on it already, but just this idea of how difficult it is to get away from these boom bust cycles, because everyone comes out of the last experience thinking, that's the way the market is, that's the way the world works, That's the way it's always going to be.

And then they proceed to become very fiscally conservative. It's all about cash flow versus funding new exploration and digging. And then we end up with a tight market. And then it seems like it's hard to get out of that. I guess this is the question, right? Like whether or not higher prices do incentivize more production or whether or not something has fundamentally changed. It really is striking. I mean, I was always sort of aware they're like, okay, you have short cycle, short cycle commodities and long ones.

So it's like you can start to ramp up oil production pretty fast right now if you added some more rigs. You could theoretically add acres to agriculture and get more wheat, corn, and soy, you know, in a sort of somewhat seasonal, timely manner in a few months. But I was always sort of, you know, I understand that it's not an overnight or even one year process to get a new mine online. But the fact that like we're now in this two-year commodity bowl market and we're still haven't seen any new groundbreaking on anything. we might need even higher prices yet. And then given that that was pretty striking, it used to be nine months now it might be three years, that like you can start to see why this could be,

as Jeff said the last time we talked to the tightest commodity market we've ever seen. It also kind of begs the question of whether or not you need some sort of stability mechanism there. So, you know, the oil and gas market has OPEC, which has at various times been described as the central bank for crude oil. And I wonder if you had something to sort of soften some of those troughs and peaks or just try to offset human nature, right? And the fear, greed cycles. Yeah, that's probably it's, yeah. The lithium chart, by the way, that you mentioned, is totally crazy.

I'm just looking at it. I hadn't realized. I didn't realize either. That lithium chart is completely nuts. And yeah. And so, like, also I thought his point was really interesting about like how the end user. of copper for as important as it is, that's not the key price. And so it's like you could have like, what?

I don't know, triple like of the copper price. It's not going to affect the price of a Tesla that much, right? And so you get in this situation, which like, well, it's not going to discourage any buyers. And so the demand just keeps going straight up. Anyway, so much in there. And we got to do more like on the whole talent thing, like all these people who are like got out of. Yeah, I think this is exactly what it is, right? You think of it as a market, but ultimately the disqualification.

decisions that are impacting the market are being done by actual people. And so we need to talk to like the head of a mining company and ask them, why don't you drill more or why don't you dig more? And we need to talk to a minor and we need to talk to the dean at the Colorado School of Mines, or Texas A&M about like our students excited about going into mining again. Yeah, I think we should do that. Let's do that. All right. All right. Should we leave it there? Let's leave it there. This has been another episode of the All Thoughts podcast. I'm Tracy Allaway. You can follow me on Twitter at Tracy Allaway. And I'm Joe Wisenthall. You can follow me on Twitter at The Stallwork. Follow our producer, Carmen Rodriguez, at Carmen Arman. Follow the Bloomberg head of podcast, Francesca Levy, at Francesca Today. And check out all of our podcasts at Bloomberg under the handle at Podcasts. Thanks for listening.