Why copper is the next multi-bagger and palladium is a fading era. And how to profit from it.
Key Takeaways:
- Global copper demand will grow from 28 to 42 million tonnes by 2040 (+50%), with a deficit on the order of 10 million tonnes. Four independent drivers (EV, AI, power grids, defense) are pressing simultaneously.
- Supply cannot keep up: a new mine takes 18 years to build, ore grades are declining, and China has monopolized smelting.
- 84–90% of palladium demand comes from autocatalysts for gasoline engines. Electrification is destroying this market, albeit more slowly than many assume.
- A spread position Long Copper / Short 0.5x Palladium exploits the divergence in trends with a positive expected value (+18.9% over 2–3 years) and multi-bagger upside in the bull case (+30–83%).
- Copper currently trades around $0.40/oz (all copper prices are quoted in dollars per troy ounce). The target range for 2026–2035 is $0.31–0.47/oz with brief spikes during squeezes. Bank consensus systematically lags the market.
Every decade, the market picks its asset. And every time, the majority figures it out too late, when the price has already done 3x, 5x, 10x.
Gold: those who bought in 2019 at $1,300 are sitting on +320%. Those who waited for a correction got $5,500 and are now afraid to buy. Silver in 2025 delivered +240% in a single year. Uranium in 2001–2007 returned +1,380%. Rhodium returned +2,900%.
Copper is the asset of the 2020s and 2030s. Not because some bank wrote it in a report. Because physics, mathematics, and geopolitics are all pointing to the same conclusion simultaneously: the world will soon face a catastrophic copper shortage. And no amount of money can solve this problem quickly, because a new mine takes 18 years to build. Copper today sits roughly where silver was before its parabolic move. A smooth uptrend since 2015. No hype. No crypto-bloggers with a #copper hashtag. Trends are born in silence.
And palladium, the metal that was king in 2016–2020 (rising from $500 to $2,500+ per ounce), stands on the threshold of structural decline. Its primary and nearly sole consumer: the catalytic converter in a gasoline engine. An electric vehicle does not need a catalytic converter. Full stop.
These two trends, one up, the other down, create a rare opportunity to construct a spread position Long Copper / Short Palladium. This is not a bet on a single metal, but on the divergence of two trajectories. A bet that the world is electrifying, that AI is devouring energy, that grids are obsolete, and that all of this demands copper, not catalytic converters for gasoline cars.
This is not a theoretical construct. The Cu/Pd spread already reversed in 2020, precisely at the moment mass EV sales began. The market is already voting with its money. The only question is how long you will keep watching from the sidelines.
1. Copper: Four Reasons for Multi-Bagger Growth
Forget everything you knew about copper as a “boring industrial metal.” What is happening to this market has no precedent in the last 100 years.
Global copper demand today stands at approximately 28 million tonnes per year. By 2040, it will reach 42 million tonnes according to S&P Global, the largest analytical agency in the commodities sector. That is +50% over 15 years.
But the most important part is where this growth will come from. Not from a single source, as in the 2000s (when everything was driven by China). Rather, from four simultaneous, independent megatrends.
In the 2000s, the entire copper supercycle (+462%) was driven by one factor: Chinese urbanization. One driver. One region. And that was enough for a decade of growth.
Now four independent drivers are at work. Transport electrification spans the entire globe. AI infrastructure means trillions of dollars in investment from Microsoft, Google, Amazon, Meta. Grid modernization means government programs totaling $7.5 trillion. Defense means an arms race independent of the economic cycle. If one pillar collapses (say, an AI winter), the other three keep pressing.
Electric Vehicles: Copper Instead of Gasoline
Every electric vehicle contains 83 kg of copper, which is 3.6 times more than a gasoline car (23 kg). Copper is the motor windings, the high-voltage wiring in the battery pack, the power cable at the charging station, and the transformer at the substation that feeds the charger. When you charge a Tesla, copper is at work on every meter of the path electricity takes from the power plant to your battery.
The world plans to transition 1.5 billion gasoline cars to electric. That is a colossal volume of additional metal. Copper demand from EVs and charging infrastructure will grow from 2.6 to 6.3 million tonnes per year by 2040, a 2.4x increase.
Power Grids: The Biggest and Most Underestimated Driver
Here is something few people grasp: power grids, not electric vehicles, are the largest consumer of copper. And they need to double in capacity.
The electrical grids in most developed countries were built in the 1960s-1980s. They were not designed for electric vehicles, solar panels, or AI data centers. Imagine: your neighborhood is simultaneously charging 50 Teslas, powering two server racks, and absorbing reverse current from rooftop solar panels, while the substation was engineered for 1975-era loads. That is precisely what is happening right now.
By 2040, the world must add or upgrade 80 million kilometers of power grids, equivalent to the entire existing global transmission system (IEA data). Every kilometer of high-voltage trunk line contains 19.5 tonnes of copper. Every kilometer of distribution network contains 3.7 tonnes. Total investment in modernization amounts to $7.5 trillion by 2040.
Copper demand from power grids doubles, from 3.5 to 7.1 million tonnes per year. That exceeds the entire current demand from electric vehicles. And this demand is politically locked in: governments have already allocated budgets, signed contracts, and begun construction. It cannot be canceled by a rise in the copper price.
AI and Data Centers: The Paradox That Blows Up the Market
A single AI training cluster consumes 30–47 tonnes of copper per megawatt of capacity, which is 7–12 times more than a conventional power plant. Morgan Stanley estimates demand from new data centers at 740,000 tonnes in 2026 alone.
The paradox: 30–50% of data centers planned for 2026 risk being delayed due to energy shortages. At first glance, that means less copper demand, right? No. The opposite. Every solution to the problem (building power plants, running cables, upgrading substations) requires even more copper. Copper is not the victim of the energy deficit. Copper is its resolver.
The cost of copper represents 2–4% of total data center investment (roughly $115 million on a $3–5 billion project). According to Wood Mackenzie, developers “use copper without regard to price.” Demand is price-inelastic: a price increase will not kill these projects.
Why Banks Systematically Underestimate Copper
Goldman Sachs in December 2025 forecast $0.31–0.34/oz for 2026. The market delivered $0.45/oz. This is not an accident; it is a pattern.
Bank models are built on physical balances and mean-reversion. They fail to account for two things: capital rotation from equities into commodities (when the price is set by the volume of money seeking exposure) and the nonlinearity of deficits (a surplus of 500,000 tonnes means stable prices, while a deficit of 330,000 tonnes with low warehouse stocks means a price explosion).
The current cycle has delivered +215% from the low ($0.14 to $0.45/oz). In the 2001–2011 supercycle, copper rose +588%. Rallies of 60–130% over 12–18 months are the norm, not an anomaly. Copper is early in this move.
2. Why Supply Will Not Come to the Rescue
Fine, demand is growing. But perhaps production will grow too?
No. And it will not. At least, not in time.
18 Years from Discovery to the First Tonne
Here is the fact that defines everything: the average time from discovering a copper deposit to the moment the first tonne of cathode copper reaches the market is 17.9 years globally. In the United States, it is 29 years (environmental impact studies, lawsuits, NEPA). In Zambia, it is 34 years (no roads, no energy, no infrastructure).
This is not abstract statistics. It means: even if the copper price doubles tomorrow and every mining company in the world rushes to open new projects, the physical metal from those decisions will not reach the market before the 2040s. The 2026–2035 deficit is already locked in. It cannot be prevented; it can only be endured at elevated prices.
A study by the University of Michigan (Simon et al., 2025) found that to incentivize the development of new deposits, the copper price must double, to roughly $0.81/oz. It currently stands at approximately $0.40/oz. And even at double the price, physical metal would not appear before 2035.
To cover baseline growth alone through 2050, the world needs 78 new large-scale mines with a capacity of 500,000 t/year each. Historically, the industry commissions 2–3 per decade. The math does not work.
Ore Grades Keep Declining
Even at existing mines, the situation is deteriorating. Copper content in ore has fallen 40% since 1991: from 1.0% to 0.52%. In Chile, the world’s largest producer, it has dropped from 1.02% to 0.66%.
What does this mean in practice? To produce the same tonne of metal, you now need to process 54% more rock mass. More excavators. More diesel fuel. More water in regions where water is already scarce (Chile’s Atacama, one of the driest deserts on earth). More electricity for concentrators. Every year, mining becomes more expensive, more energy-intensive, and more environmentally damaging. This is an irreversible trend: ore grades cannot rise back.
China Controls Smelting, and That Is a Ticking Time Bomb
Between the mine and finished cathode copper (99.99% purity that can be sold on an exchange) stands the smelter. It converts copper concentrate (25–35% copper content) into an exchange-grade commodity. Historically, the miner paid the smelter for this service, much like a farmer pays a miller for grinding grain.
47% of global smelting capacity is in China. Since 2005, China has accounted for over 90% of the global increase in this capacity. China built so many smelters that they now compete with each other for ore, and the economics have flipped.
Treatment and refining charges (TC/RC) have gone negative: in January 2025, a record minus $49/t was registered. This means: the smelter pays the miner for the right to receive ore, just to keep its plant running on something. The annual benchmark for 2026 is zero. For the first time in history. There are too many smelters and not enough ore.
In parallel, trade flow fragmentation is unfolding. Indonesia banned concentrate exports. DR Congo requires 40–60% domestic processing. The US imposed a 50% tariff on copper products (Section 232), creating a COMEX premium over LME of $0.08/oz. Cascading resource nationalism is not a hypothesis; it is reality. It is already happening and adds +20–40% to the price. The world is moving toward two parallel copper markets: a “Western” one (COMEX/LME with a tariff premium) and an “Eastern” one (SHFE at a discount). Chilean and Peruvian concentrate (67% of Chinese imports) is becoming a contested asset between two superpowers, much as Middle Eastern oil once was.
Scrap Recycling and Aluminum Substitution: No Silver Bullet
“Why not just recycle old copper?” Three independent models (Born & Ciftci running 30,000 simulations, S&P Global, Diersen & Olivetti at MIT) give the same answer: the share of scrap in supply will not exceed 33–50% of demand even by 2050. Today it is just 23%.
Why so little? Because over 460 million tonnes of copper are literally “walled up” inside buildings, underground cables, and pipelines with designed service lives of 40–100 years. The copper wiring in your house will function for 70–100 years and remain in the wall until the building is demolished. An underground cable is rated for 30 years but lasts 50+. The copper the world installs in infrastructure today will return to circulation in the 2060s-2080s, not sooner.
And aluminum? It can replace copper in air conditioners (already 40% of global units use aluminum), in EV wiring harnesses (Xiaomi has already adopted this), and in transformers. But 40–50% of demand is irreplaceable at any price:
- Data centers: an aluminum conductor is 60% thicker, and a 120 kW rack simply has no room
- EV motors: copper conductivity is 40% higher, thermal conductivity 69% higher, and hairpin windings work only with copper
- Subsea cables: corrosion resistance to seawater, span lengths of 50+ km
- Liquid cooling: at rack densities of 100–600 kW, only copper heat exchangers can cope
The realistic substitution volume is 3–5 million tonnes (10–18% of demand). This covers only a fraction of the 10 million tonne deficit. The rest is the “hard core” where physics does not permit the use of anything other than copper.
If Copper Gets More Expensive, Won’t Demand Die?
A fair question. And here is the answer: the price elasticity of copper demand is among the lowest of all industrial metals.
According to IMF data (2024), if copper rises by 10%, short-term consumption declines by just 0.8%. The reason is simple: more than half of demand growth comes from government electrification programs, defense orders, and data center construction contracts. These projects cannot be “canceled” because the copper price went up; that would mean canceling the project itself. A $7.5 trillion grid modernization program does not stop because copper got 20% more expensive.
Full market adaptation (substitution, project cancellations, shift to alternatives) takes 5 years. And even then, demand destruction is limited: at $0.37–0.47/oz, it amounts to minus 3–9% of demand. Above $0.47/oz, it reaches minus 12–20%. But here is the critical point: this destruction triggers a reverse cycle. Investment in new mines halts, and 10–15 years later, the deficit returns even more acute.
This is precisely why copper will most likely oscillate in the $0.31–0.47/oz range for much of 2026–2035, with upward spikes during squeezes. Goldman Sachs views $0.47/oz by 2035 not as a ceiling but as the “incentive price,” the level at which the economics of new mines begin to work. Anything below that is a zone of chronic deficit.
3. Palladium: The Sunset of the Catalytic Converter Era
Now let us turn to the second leg of the strategy. If copper is the metal of the future, palladium is its mirror opposite.
Palladium is a beautiful metal. Expensive, rare, lustrous. But its fate is tied to a single technology. 84–90% of global palladium demand goes to catalytic converters for gasoline engines. Every time you start a gasoline car, the exhaust gases pass through a catalyst containing 2–7 grams of palladium. Without the catalyst, the car cannot pass emissions standards in any developed country. Without palladium, there is no catalyst.
Palladium was king in 2016–2020: the price rose from $500 to $2,500+ per ounce. Thirteen consecutive years of supply deficit. Dieselgate shifted Europe from diesel (platinum) to gasoline (palladium), and no one was building new mines. A classic deficit supercycle.
But now the pendulum has swung the other way.
“The Death of ICE” Is Exaggerated, but the Direction Is Relentless
The popular narrative: EVs will replace everything, palladium will crash to zero. Reality is more nuanced.
Global EV sales reached 17.8 million in 2024 (20% of new sales). That sounds impressive. But new sales represent a small fraction of the active fleet of 1.5 billion vehicles. Even with a 40% EV share of new sales by 2030, gasoline and hybrid vehicles will dominate the roads through the 2040s.
Production of vehicles requiring palladium (ICE + hybrids) is declining from 79 million in 2024 to 67 million by 2030, an erosion of -1.3% per year, not a collapse. WPIC states explicitly: “Vehicles with ICE and hybrids will dominate auto production through 2040.”
Moreover, the slowdown in electrification has surprised the market: 50% of global car buyers intend to purchase an ICE vehicle (EY survey, +13 percentage points year-over-year); BEV preference has fallen to 14%. BloombergNEF cut its US EV sales forecast through 2030 by 14 million units. The reasons: subsidy rollbacks under the Trump administration and practical problems with charging infrastructure.
And here is the paradox few account for: plug-in hybrids (PHEV), the fastest-growing segment (+62% in Europe, 22% of all US sales, 25% of electric SUVs in China), require 10–20% more palladium than a standard ICE. The hybrid engine cycles on and off, the catalyst spends more time in “cold” mode (below the activation temperature of 250–400 degrees C), and engineers compensate by increasing palladium loading. As long as hybrids dominate as a transitional format, palladium has a structural buffer.
Supply Is Also Collapsing, and That Is the Main Risk for the Short
Here is what makes the palladium short nontrivial: supply is shrinking faster than demand. The palladium market is not only a demand story. It is also a story of dying mines.
Sibanye-Stillwater, the only primary palladium producer in the US, announced a production cut at the Stillwater and East Boulder mines of ~45% (approximately 200,000 ounces out of 440,000–460,000). The reason is straightforward: at current prices, production is unprofitable. AISC is running at $1,343 per ounce, above the selling price.
Lac des Iles (Canada) is heading toward cessation of commercial production by mid-2027. Impala Platinum (South Africa) has placed the Two Rivers mine on care and maintenance. Chronic load shedding in South Africa constrains output across the entire Bushveld Complex, the world’s largest PGM region.
And Nornickel provides 40% of global palladium supply. That is a permanent geopolitical risk. There are no direct sanctions on Russian palladium yet, but logistics and payment restrictions are already hampering shipments. Any escalation, and 40% of global supply is in question. With exchange-registered stocks of just 210,000 ounces (NYMEX/COMEX), that is a recipe for a disproportionate price spike.
After 13 years of deficit (2012–2024), the market has shifted into surplus. By 2029, the surplus will reach 689,000 ounces. But the market has already discounted roughly 60% of the bearish scenario (decline from the peak of $2,398 to $924/oz). This is precisely why the short leg is half-sized (0.5x), not full: the remaining downside potential is limited, while tail risks (sanctions on Nornickel) are real.
4. The Cu/Pd Spread and Strategy Construction
What History Tells Us
The copper-to-palladium price ratio (Cu/Pd) is a mirror of the technological transition. Its inversion in 2020 coincides precisely with the onset of mass EV sales.
Calculated from COMEX/NYMEX data, 212 monthly observations.
Correlation confirms the thesis: during the divergence phase (2023–2025), Cu/Pd correlation dropped to +0.04, essentially zero. The metals move independently; each leg of the strategy is driven by its own fundamentals.
Construction: Long Cu 1.0x / Short Pd 0.5x
- Long leg: copper upside (full size)
- Short leg: palladium downside (half size)
- Horizon: 2–5 years
- Current entry price: copper around $0.40/oz; palladium around $1,400–1,700/oz
- Copper price corridor for 2026–2035: $0.31–0.47/oz with brief spikes during squeezes; Goldman Sachs projects $0.47/oz by 2035 as the “incentive price”
- Upside in a supercycle: historical analogs yield +462% (2001–2006) and +588% (2001–2011) from the trough; the current cycle has delivered +215% so far
Why 2:1, not 1:1? Three reasons. First, conviction: the bullish thesis on copper is supported by four independent drivers, while the bearish case on palladium is complicated by tail risks (Russia sanctions, PHEV boom). Second, volatility: palladium swings 2–4% per day (copper 1–2%); at equal sizing, the Pd leg would dominate P&L. Third, risk management: sanctions on Nornickel (40% of global palladium) could send palladium up +50–100% within months; half-sizing caps the loss.
Where and How
HyperLiquid: perpetual futures on copper and palladium on a single platform. No verification required, starting from $50. Trading is 24/7. At x1 leverage (effectively spot), there is no liquidation.
CME: HG futures (copper) and PA futures (palladium). Maximum liquidity, but a single contract runs $136,000–147,000.
ETF: CPER (copper) + PALL (palladium). No funding costs, but going short requires a margin account.
Funding is the key expense on perpetuals, and it warrants further explanation. Perpetual futures use periodic payments every 4–8 hours to anchor the contract price to spot. When the market is bullish (more longs than shorts), longs pay shorts. For copper in a bullish trend, this means you pay for the right to hold a long position. Over a 2–3 year horizon, cumulative costs amount to 10–30% of notional, a serious figure.
And this is precisely why the Pd leg matters: the short palladium position receives funding (the short side receives when the market is in contango or neutral). The Pd leg serves a dual function: fundamental hedge (profit from palladium’s decline) + funding hedge (partial offset of costs on the Cu leg). Net expense after offset: roughly 5–12% over 2–3 years instead of 10–30% for a naked copper long.
Entry Tactics: Do Not Try to Catch the Bottom
The cardinal mistake 90% of traders make when entering a long-term position: trying to find the “perfect point.” They wait for a correction. Then another. Then copper runs up +30%, and they pile in at the highs out of fear of missing out (FOMO). Then a -15% correction hits, panic sets in, and they close at a loss. Sound familiar?
The right approach is scaling in (DCA). Divide your target size into 5–10 tranches. Enter once every 1–2 weeks regardless of price. If the market gives you a 10–15% correction, accelerate the accumulation; that is a gift. If it has run up, slow down but do not stop. You are buying a trend, not a point.
On HyperLiquid at x1 leverage (effectively spot), there is no liquidation. Your only enemies: funding and time. But if the thesis is correct, time works in your favor. In 2025, copper was knocked down 20–25% in a single daily candle; that is aggressive play by large participants against the crowd. Every such crash is an opportunity to add to the position, not a reason to panic.
What NOT to do:
- Do not enter with your full allocation at once; always DCA
- Do not use leverage above x2 on a 2+ year horizon; funding will eat your profits
- Do not panic on a 15–20% correction; that is normal volatility for copper
- Do not ignore the Pd leg; without it, funding costs are unmanageable
5. Risks and Scenarios: An Honest Conversation About What Could Go Wrong
Any investment thesis that sounds like “it can’t fail” is a reason for extra caution. Let us honestly examine what could break the thesis.
Base scenario (40–50% probability) is the most likely outcome. Electrification proceeds at its current pace, the copper deficit builds gradually, and palladium erodes slowly. Copper stays in the $0.31–0.47/oz range. Not an explosion, but steady growth. Result: +8–35% over 2–3 years.
Bull scenario (20–25%) means a supercycle or squeeze. Force majeure at a major mine, a tariff shock, capital rotation from equities into commodities. In 2020–2021, copper rallied +128% from its COVID low. In 2001–2006, it delivered +462%. Result: +30–83%. This is not fantasy; it is what copper has already done.
Bear palladium (10–15%) means accelerated BEV adoption, a battery technology breakthrough. Palladium falls to $700–800/oz. Copper rises modestly. Both legs in the green: +5–30%.
Geopolitical shock (5–10%) is the most painful scenario. Full-scale sanctions on Nornickel (40% of global palladium). Palladium surges +50–80% within months. A loss is incurred, but it is capped by the half-sized short leg. And historically, sanctions-driven PGM shocks are short-lived: supplies are rerouted through third countries within 3–6 months, after which the price corrects.
Recession (10–15%) means a global downturn; both metals fall. The Pd leg partially offsets the Cu leg’s losses (palladium may fall harder). Result: -12.5–30%. Painful, but not fatal, and this is the only scenario where the position does not work at all.
Expected value: +18.9% over 2–3 years. The probability of profit is 79%; of loss, 21%.
Even under an aggressively pessimistic skew (35% allocated to adverse scenarios instead of 21%), expected value remains positive (+2.1%). The strategy requires conviction that the combined probability of recession plus geopolitical shock does not exceed roughly 30%.
When to Exit: Conditions for Thesis Invalidation
1. On copper: global PMI below 48 + tariff rollback + Chinese demand below -10% -> price below $0.28/oz.
2. On palladium: Nornickel sanctions + BEV halt + reverse Pt->Pd substitution -> price above $2,000/oz.
3. On the spread: Cu/Pd below 5.0x sustained for more than 3 months.
How the Strategy Would Have Performed Historically
Two periods were loss-making, two were profitable. It is important to understand why.
2016–2020 would have been catastrophic (-145%). Palladium surged +320%: Dieselgate shifted Europe from diesel to gasoline, catalytic converter demand exploded, and supply did not grow. But in 2016, the electrification thesis did not exist. BEV sales were under 1 million per year, no one was discussing AI data centers, and the energy transition was an abstraction.
2020–2024 validated the thesis (+112.5%). The Cu/Pd inversion coincided with the mass launch of EVs. Palladium fell -65%, copper rose +80%.
The strategy works only in a divergence regime. It is not a statistical arbitrage of “buy cheap, sell expensive.” It is a directional bet on divergence, backed by fundamental analysis. The thesis: the world is electrifying, AI is devouring energy, grids are obsolete, and all of this demands copper. Is electrification still underway? Yes. If you believe that, the position is justified. If not, do not enter.
6. Why Now, and Why Waiting Is Dangerous
Timing is the most common question. Why not a year from now? Why not wait for a correction?
Because the entry window is closing. Here is why:
- 2020: the Cu/Pd spread inverted. The market began pricing in electrification. Few noticed.
- 2021–2023: copper rises, palladium falls. The divergence gathers speed. Meanwhile, analysts debate whether this is “temporary” or “structural.”
- 2024–2025: copper hits all-time highs. Banks raise forecasts, but with a lag. Consensus remains $0.31–0.37/oz for 2026, yet the market delivers $0.45/oz.
- 2026 (now): demand from AI infrastructure is going exponential. Section 232 is fragmenting the global market. The concentrate deficit is chronic; TC/RC are at zero. This is no longer a forecast; it is fact.
- 2027–2030: peak primary production (27 million tonnes), after which output begins to decline without new mines. The deficit widens to 1–2 million tonnes per year. The price starts reflecting the actual physical deficit, not expectations.
Every year of delay is a year the trend advances further. The gold analogy is instructive: those who bought in 2019 at $1,300 are sitting on +320%. Those who waited for a “good correction” got $5,500 and are now afraid to buy. The same goes for silver: those who entered at $22 in early 2025 made +240% in a year. Those who waited for $18 never saw it.
Copper today is silver in early 2025. A smooth uptrend since 2015. No hype. No crypto-bloggers. No WallStreetBets squeezes. No screaming Bloomberg headlines. That is precisely the sign that we are at the beginning, not the end.
When copper starts being shouted about from every rooftop, the position will already have been built. Or it will not have been. The choice is yours.
7. Summary: Why This Is the Trade of the Decade
Copper is the physical conductor of the most massive economic transformation in a century.
On the demand side: four independent growth vectors (+50% by 2040). On the deficit side: an 18-year lag from discovery to production, deteriorating ore grades (-40% in content), Chinese monopoly on smelting (47% of capacity, TC/RC at zero), a ceiling on secondary recycling (23–33%), and an irreplaceable “hard core” (40–50% of demand). The result: a deficit on the order of 10 million tonnes by 2040. This is not the forecast of some fringe blogger; it is the consensus of S&P Global, Wood Mackenzie, and J.P. Morgan.
Palladium is the mirror image. 84–90% of demand is tied to the gasoline engine, a technology in decline. The surplus grows to 689,000 ounces by 2029. The market has already priced in 60% of the decline. The remaining downside is limited, and tail risks (Russia sanctions) are real, which is why the short leg is half-sized.
The spread position Long Cu / Short 0.5x Pd is not a bet on a single asset. It is a bet on the divergence of two trajectories, driven by the energy transition. Positive expected value (+18.9% over 2–3 years). Multi-bagger upside in the bull scenario (+30–83%). A built-in hedge via the Pd leg. Clear exit conditions.
Trends are born in silence. Nobody was shouting about gold at $1,300 in 2019. Nobody was shouting about silver at $22 in early 2025. Nobody is shouting about copper now. When they start, it will be too late.
The question is not whether copper will rise. The question is whether you will build your position before everyone else finds out.
This research is based on data from S&P Global, J.P. Morgan, Goldman Sachs, ICSG, WPIC, Johnson Matthey, the University of Michigan, and calculations using COMEX/NYMEX data. A full academic version with a bibliography of 28 verified sources is available separately.
Disclosure: the author may hold positions in the instruments described. This material represents an analytical opinion and does not constitute individual investment advice.