Doctor Copper Seems to Have Lost His PhD in Economics. What If the Energy Transition Was the Real Cause?

Is Doctor Copper becoming an energy transition expert?

If you're interested in economics and financial markets, you've probably already heard of Doctor Copper. I wrote about him back in July 2022, when I explained that “Doctor Copper is known to have a Ph.D. in economics”.

The concept here is that copper is an economic doctor. The evolution of the copper price would be a leading indicator of the state of health of the global economy.

Behind this concept lies a simple idea: copper is everywhere in our modern economies. As such, copper consumption has historically been highly correlated with global economic growth.

However, in 2022, we saw that Doctor Copper was wrong to predict a coming recession. So the situation is changing. For some years now, we've been observing a disconnect between copper price trends and growth indicators.

Over the last five years, for example, the variation in copper prices relative to the US Purchasing Managers' Index has been almost half what it was at the beginning of the 2000s.

In 2023, Doctor Copper's loss of relevance was confirmed.