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Infrastructure Bump? China’s Splurges on Copper and Lithium

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EDITOR NOTE: Biden’s infrastructure plan may hit a serious snag or an expensive bump up in price as the supply of copper--essential to just everything his administration is trying to do--is running low. China bought 6.7 tons of it last year--a move that drove copper prices higher, not to mention other commodities that China accumulated in massive amounts. From April 2020 to 2021, copper rose 90%. With Europe taking a similar stance toward infrastructure and renewable energy, its demand will be an additional factor squeezing the current supply. Copper isn’t the only problem. Renewable energy requires rare earth metals of which China holds a virtual monopoly in terms of mining and production. Higher input costs mean greater levels of government spending. Increased spending means more taxation and money printing. All of those factors combined point to significant declines in your purchasing power as inflation rapidly eats away the value from your hard-earned dollars.

President Joe Biden’s big plan to rebuild the United States and compete with China has already hit something of a hurdle. To do this, America requires steel for roads and bridges, and cobalt and lithium and rare earth for batteries, and above all, it needs copper, and lots of it. The problem is, China has perhaps beaten America to it. Bloomberg’s Mark Burton reports on “Bloomberg Markets: European Open.”

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Originally posted on Yahoo! Finance

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