 | | | | EVs and Renewable Energy Boost Copper Demand | | David Fessler, Energy and Infrastructure Strategist, The Oxford Club | | |  Retire Rich on One Stock!
Virginia stock-picking millionaire says forget diversification! Buy one single $3 stock - that trades under a secret name - and you could retire rich. His instructions are here. | | | Copper investors haven't been very happy campers recently. That's because the price of copper and shares of copper miners have been slowly dropping.
In January 2018, copper hit a high of $3.33 per pound, but it has since dropped below $2.80.
Copper's drop has sent the prices of major producers down too. Shares of Freeport-McMoRan (NYSE: FCX) are way down from their 52-week high.
So where are the price of copper and shares of mining stocks going from here? Based on a perfect storm of a coming lack of supply and increased demand, I believe copper is going nowhere but up.
Supply Running Low
Let's first look at the supply side. Here are the top 10 producers, ranked in order of copper production in 2017 (the most recent year for which data is available)… Together the top 10 producers mined and refined more than 9.83 million metric tons of copper in 2017. The top four companies produced more than 62% of all copper in 2017.
The problem is not enough new mines are being opened.
The top mining operations are producing 10% to 15% less copper today than they were a decade ago. Existing mine reserves are dwindling.
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In this shocking video, he reveals how you can start claiming up to $10,670 in FREE crypto. | | | Long term, copper production is expected to ramp up to offset the lack of supply. It's expected to be 150,000 metric tons in this year and 350,000 metric tons in 2021.
Demand Preparing to Soar
Let's look at the demand side. I've been writing about electric vehicles for a decade now.
EV sales were slow up until a few years ago. Now we are finally starting to see some big sales numbers.
And big EV sales translate into a big incremental demand for copper. For instance, an all-electric SUV like the Tesla Model X gobbles up more than 220 pounds of copper.
It's not used in just batteries either. Motor windings and heavy wires needed between the battery pack and motors add plenty of copper to an EV.
In 2018, total global EV sales hit 1.71 million - up 40% year over year. And total U.S. EV sales reached 360,000 - up 80% year over year.
Experts predict that by 2025, 1 in every 4 vehicles sold in China will be electric. And China recently increased subsidies for EVs with large battery packs.
By 2025, copper from EVs should add 3.32 million metric tons to overall copper demand. But that's not even going to be the big demand driver that could cause a potential copper supply-demand gap…
That's going to come from the buildout of renewable energy infrastructure. This is an event that is going to play out over the next one to two decades.
By 2025, solar alone is expected to add 2.5 million metric tons of copper demand. And wind energy installations are expected to tack on another 1.85 million metric tons.
The U.S. is planning numerous copper-hungry offshore wind farms in the Atlantic that use more than 9 metric tons of copper per megawatt.
All of which is extremely bullish for copper.
Listen up, investors: It's time to take some of your funds and invest them in one or more of the miners listed above.
Good investing,
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