See how copper is shaping up to be the number one play for the future.
Investing short to medium-term right now might not be for the faint of heart as the market is still adjusting to the inflation numbers, crypto has come under a serious amount of pressure, and volatility is spiking up.
But while it might look like all eyes are on the Federal Reserve and what they might be about to do with the interest rates, the 7% gain in the Consumer Price Index shouldn’t come unnoticed by seasoned investors, especially those in the commodity field given that it marked a 39 year high.
So, why microprocessors exactly? Let’s start out with a bird’s eye view and zoom in to find the answer.
The macro level: the commodity situation
In 2021 supply chains were seriously bottlenecked, energy costs ramped up, and, lastly, government spending paired with high consumer demand drove up inflation throughout the world.
Commodities have been historically a safe haven to many investors when dealing with inflation, especially when dealing with longer-term inflation.
Case and point, commodities outperformed every other asset class last year and seem to be bound to go off on a very competitive run in 2022.
Goldman Sachs, namely Jeffrey Currie, its Global Head of Commodities, has recently called a 10-year commodity supercycle and, as we know, runaway inflation is stepping up to be one of the greatest risks to the market this year.
Zooming in on copper
Copper is seeing an ongoing supply crunch and their price per ton seems to be steadily on the rise. With copper playing a key role in sustainable tech, clean energy, electric vehicle batteries, and microchips, we’re most likely bound for a wild ride in the next couple of years.
Enhancing: Microchips, the industry in which copper turns to “gold”
No, it’s not alchemy that we’re talking about.
What we’re seeing right now in the microprocessors industry is a steady increase in demand being met with a significant downturn in terms of production capacity.
The latest tech requires the faster, state of the art chips which only a handful of companies can manufacture them.
Demand is also showing the shift in the workplace (as companies now employ much more remote workers), the shift in tech towards cloud computing services (which need the infrastructure to scale), the shift in entertainment towards streaming websites, the shift towards electric vehicles, and the shift towards crypto (which made it impossible to buy new graphics cards).
Wrapping up
All of the above require microprocessors and all of the above have a common denominator: copper.
Scarcity combined with this handful of companies fixed max output means that they won’t be able to put the “pedal to the metal” as manufacturing all types of chips simultaneously is simply impossible. Accordingly, what we’re seeing right now is their lead time (a gap between when a semiconductor is ordered and delivered) increasing rapidly by the month.
Even though the lead time might vary depending on chip type, to put things into perspective, a Susquehanna Financial Group report took notice of how semiconductors in November 2021 saw their lead time increased by a whole 6 days and now standing at 25.8 weeks.
Moreover, even environmental factors have taken a toll over the whole industry as the biggest production locations got hit: Texas had blackouts last year and Taiwan faced a massive drought (the industry is heavily dependent on water) and farmer and environmentalist protests (as the water becomes unfit for consumption).
All of these factors combined made the players come out and warn their customers about expecting shortages throughout the year, which means that there is ample opportunity for investment.
Investing short to medium-term right now might not be for the faint of heart as the market is still adjusting to the inflation numbers, crypto has come under a serious amount of pressure, and volatility is spiking up.
But while it might look like all eyes are on the Federal Reserve and what they might be about to do with the interest rates, the 7% gain in the Consumer Price Index shouldn’t come unnoticed by seasoned investors, especially those in the commodity field given that it marked a 39 year high.
So, why microprocessors exactly? Let’s start out with a bird’s eye view and zoom in to find the answer.
The macro level: the commodity situation
In 2021 supply chains were seriously bottlenecked, energy costs ramped up, and, lastly, government spending paired with high consumer demand drove up inflation throughout the world.
Commodities have been historically a safe haven to many investors when dealing with inflation, especially when dealing with longer-term inflation.
Case and point, commodities outperformed every other asset class last year and seem to be bound to go off on a very competitive run in 2022.
Goldman Sachs, namely Jeffrey Currie, its Global Head of Commodities, has recently called a 10-year commodity supercycle and, as we know, runaway inflation is stepping up to be one of the greatest risks to the market this year.
Zooming in on copper
Copper is seeing an ongoing supply crunch and their price per ton seems to be steadily on the rise. With copper playing a key role in sustainable tech, clean energy, electric vehicle batteries, and microchips, we’re most likely bound for a wild ride in the next couple of years.
Enhancing: Microchips, the industry in which copper turns to “gold”
No, it’s not alchemy that we’re talking about.
What we’re seeing right now in the microprocessors industry is a steady increase in demand being met with a significant downturn in terms of production capacity.
The latest tech requires the faster, state of the art chips which only a handful of companies can manufacture them.
Demand is also showing the shift in the workplace (as companies now employ much more remote workers), the shift in tech towards cloud computing services (which need the infrastructure to scale), the shift in entertainment towards streaming websites, the shift towards electric vehicles, and the shift towards crypto (which made it impossible to buy new graphics cards).
Wrapping up
All of the above require microprocessors and all of the above have a common denominator: copper.
Scarcity combined with this handful of companies fixed max output means that they won’t be able to put the “pedal to the metal” as manufacturing all types of chips simultaneously is simply impossible. Accordingly, what we’re seeing right now is their lead time (a gap between when a semiconductor is ordered and delivered) increasing rapidly by the month.
Even though the lead time might vary depending on chip type, to put things into perspective, a Susquehanna Financial Group report took notice of how semiconductors in November 2021 saw their lead time increased by a whole 6 days and now standing at 25.8 weeks.
Moreover, even environmental factors have taken a toll over the whole industry as the biggest production locations got hit: Texas had blackouts last year and Taiwan faced a massive drought (the industry is heavily dependent on water) and farmer and environmentalist protests (as the water becomes unfit for consumption).
All of these factors combined made the players come out and warn their customers about expecting shortages throughout the year, which means that there is ample opportunity for investment.
FMAS:24 – Asset Allocation & Trading in a Lower Interest Rate Environment
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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