With all the well-deserved hype about Cobalt mining stocks, it’s easy to forget that where there is Cobalt there is Copper and indeed, that there are several trends that forebode a growth in Copper prices. Here are just 3 trends that are undernoticed but demand attention when it comes Copper and could see the price get to $4 per pound or higher:
- Manufacturing Is Moving Back to the USA
- High Copper Content in Growth Technology Industries
- Energy Storage
Manufacturing is Moving Back to the USA
In August 2018 CNBC reported that the US had added 327,000 manufacturing jobs for the year, its highest growth since 1995. Manufacturing growth in the USA not only drives demand for copper but it does so at a higher price than developing markets since it is a more regulated market and they are more likely to be looking for new copper vs scrap metal.
The High Copper Content in Growth Technology Industries
The electric vehicle market is growing and growing fast. In fact, there are some jurisdictions already looking to do away with fossil-fuel-burning vehicles. As the infographic prepared by Visual Capitalist shows, there is 183 lbs of copper in the average EV which is a significant increase compared to just 18 to 49 lbs in conventional cars. This technology and others will continue to fuel demand for copper going forward and has largely remained unnoticed.
There are several options for moving power around in an efficient way using cables, among them HVDC, but for many more use cases it would be more efficient to provide power through efficient storage. Copper is used heavily in energy storage. For every kilowatt-hour of a lithium-ion battery for instance, 2.4 to 2.6 lbs of copper is used.
As with most things these days, the mainstream media is looking at the latest squirrel while the biggest trends of this decade go unnoticed. Nowhere is this more prevalent than with the copper market. Every day the US President is tweeting about a US manufacturing market renaissance but this is as yet unreflected in copper prices. Ink is spilled regularly on the growth of electric and autonomous vehicles but not on the underlying technology. And anyone who has ever watched a Mad Max film knows the importance of energy storage. Hopefully we’ve equipped you with some of the major undernoticed trends so you can trade above the rest!