By Justin Spittler, editor, Casey Daily Dispatch
“You’re going to need a telescope to see the copper price in 2021.”
Robert Friedland said this in April. He was giving the keynote speech at the Mines and Money Asia conference in Hong Kong.
I’ll tell you why Friedland said this in a minute. But you should first know why it pays to listen to him.
Friedland is a legend in the natural resource space.
He’s been in the business for decades. Along the way, he’s founded several successful mining companies…and made billions for himself and his investors.
He knows a thing or two about investing.
Since his speech, copper’s risen 17%…but this run is just getting started.
Today, I’ll tell you why Friedland thinks copper’s about to shoot through the stratosphere. I’ll also show you how to profit from this coming surge. But first, a few words on the “red metal.”
• Copper is the world’s most important industrial metal…
It goes into everything—from plumbing, to power lines, to electric motors.
Because of its diversity, many investors view copper as a barometer for the global economy.
When the global economy is doing well, it usually does well too. When the global economy’s struggling, the opposite happens. It’s been this way for decades.
But Friedland isn’t calling for higher copper prices because he thinks the global economy’s about to take off. He’s bullish because of the electric vehicle (EV) revolution.
• A decade ago, the market for EVs was tiny…
There were just a few hundred of these vehicles in the world.
It’s a much different story now.
These days, the market for EVs is exploding. In fact, as I told you in yesterday’s Dispatch, some experts say the market will get 27 times bigger over the next decade.
According to Friedland, you cannot afford to ignore this:
The transformation of the auto industry in the next 20 years will be the most significant transformation of our time. …
The era of electric vehicles is dawning.
Friedland is absolutely right. The EV revolution is one of the world’s most unstoppable trends…but not just for the auto industry.
It will also radically change the oil industry…and, yes, the copper market too.
There’s a simple reason for this…
• Electric vehicles aren’t like traditional vehicles…
They run on electricity instead of gasoline or diesel.
Because of this, electric vehicles are made differently than vehicles with internal combustion engines (ICEs).
For one, they require much more copper than traditional vehicles…and for good reason.
• Copper is one of the world’s best conductors of electricity…
So, just how much more copper do EVs use? A lot more.
You see, a typical vehicle with an ICE contains between 18 and 49 pounds of copper. A plug-in hybrid requires around 132 pounds. And a pure electric vehicle requires around 183 pounds.
And that’s just passenger vehicles.
A hybrid bus contains 196 pounds of copper, while a pure electric bus contains more than 800 pounds.
• Demand for copper will skyrocket once the EV revolution really gets going…
But don’t just take my word for it.
Market research firm IDTechEx projects copper demand in EVs will swell to 1.74 million metric tons by 2027. That’s up from 185,000 metric tons today.
And that’s just for the vehicles themselves.
The infrastructure that powers the EV revolution will require huge amounts of copper, too.
Take electric charging stations, which EVs plug into.
Each one of these requires anywhere from 1.5 to 17 pounds of copper, depending on how quickly they charge vehicles.
That’s a huge deal.
• After all, EVs can’t run unless you charge them…
This means the auto and energy industries will have to build a lot more charging stations.
The Edison Electric Institute and the Institute for Electric Innovation (EEI-IEI) project that the U.S. alone will need nearly 5 million charge ports by 2025. Today, there are fewer than 70,000.
But that’s not all.
• The energy that powers the EV revolution will also require huge amounts of copper…
You see, EVs run on power that comes from “the grid.” In other words, they run on the same power that lights our desk lamps and keeps our refrigerators cool.
Today, most of that power comes from fossil fuels, specifically coal. But in the years ahead, more and more energy will come from renewable sources like wind and solar.
That, too, will have huge implications for copper.
That’s because offshore wind power requires five times as much copper as coal power. Solar, on the other hand, requires 2.5 times as much copper as coal.
• In short, the EV revolution will consume far more copper than most investors realize…
Louis James, Casey’s in-house resource expert, agrees:
If “going green” means going electric, then it means more demand for copper. This is as true for wind as for solar power. More wires, more connections, more cables, more, more, more. Unlike other metals like platinum and palladium that are used in gas and diesel engines, copper can only win from the green revolution.
According to Friedland, it’s only a matter of time before this is reflected in the copper price:
Don’t worry about the copper price today.
You’re really going to feel it bite you on the derriere by 2021.
So, consider speculating on copper if you haven’t already.
You can easily do this by buying the iPath Bloomberg Copper Subindex Total Return ETN (JJC). This fund tracks the price of copper. That makes it one of the easiest ways to bet on the EV revolution.
November 29, 2017
P.S. Surging demand isn’t the only reason copper’s about to head much higher. The copper market is also on the verge of a massive supply crunch. To learn why, be sure to read tomorrow’s Dispatch.
P.P.S. I also encourage you to sign up for Louis James’ Casey Resource Investor advisory if you haven’t already.
Louis has been researching this trend extensively. And he says copper isn’t the only industrial metal set to soar because of EVs. Lithium, cobalt, and nickel are also poised to soar in the coming years.
To see which of these metals has the most upside—and to access the specific trade to play this trend today—you’ll need a subscription to Casey Resource Investor. You can learn more about a risk-free trial right here.
By Joe Withrow, analyst, Casey Research
Today’s chart shows the huge run this year in emerging market stocks.
Emerging markets are countries on their way to becoming “developed” like the U.S. or Germany. Brazil, Russia, India, and China (known as the “BRICs”) are some of the world's biggest emerging markets.
The iShares MSCI Emerging Markets ETF (EEM), which holds over 850 emerging market stocks, has gained 35% so far in 2017.
By comparison, the S&P 500 has only gained 15%.
The reason is simple: emerging markets are still cheap…they’re in an uptrend…and they’re some of the fastest-growing economies in the world.
We expect EEM to continue to outperform the S&P 500 over the next several years.
Today, a reader writes in with a question…
Your frequent e-mails have offered a lot of value to my life and have certainly changed my view on important topics.
I have noticed that you don't talk a lot, if at all, about Biotech/Pharma. Nothing wrong with that, it might simply be a sector that doesn't interest you.
However, maybe you have had a few ideas or particular companies that you'd like to research and you never managed to get around to it?
Thanks for writing in, Thanasis.
Our in-house tech expert, Chris Wood, just uncovered a huge opportunity in the biotech/pharma sector in his latest issue of Extraordinary Technology. This stock is already up 16% since he recommended it earlier this month, and he expects readers to make three times their money over the next 17 months.
You can access this pick—and all of Chris’ research—with a risk-free trial subscription to Extraordinary Technology. Learn more right here.