Is now the time to stack copper.
Copper doesn’t get the same attention that silver and gold get but should it ?
I’m bullish on copper for the following 3 reasons:
(1) The first reason is Emerging markets. Emerging markets are countries that have some characteristics of Developed nations but not everything. For instance Brazil, Mexico, India. Now when you think about it we’re going to see more and more emerging markets building better infrastructure and copper will be needed. Also, more and more people in these countries will start wanting things like smartphones, TVs and other appliances that need copper.
(2) Is the current supply and demand situation. As mentioned, I believe demand will increase, and ultimately copper demand looks like it will outpace supply. Right now, copper supply was around 22 million ounces in 2022 and it’s been steadily increasing the last decade.
(3) The electrification push is going to push copper demand higher. So, we know the demand is here and it’s only going to increase. We’re seeing this already in the auto industry with more and more auto companies putting out more electric cars. But also, things like solar panels and electric mowers, use copper. And one thing to point out, copper is heavily used in the charging stations- these need to be built ASAP. Also, pretty much anything that is electric like computers, phones, robots all use copper. The world is heading toward automation and more and more companies are looking for ways to implement AI.
(4) Copper is cheap. Right now, you can get a 100oz bar for around $300. Copper is about 4 dollars per pound (as of 2/1/2024). And think when I think about it, it really comes down to return on investment. Of course, it’s not guaranteed to go up, but to me it seems like supply and demand will boost the price.
Now there are some disadvantgeous with copper.
- Storage- need room to store. It’s also heavy.
- Less liquid than gold and silver, less desirable and fewer stackers
- Pain to move around.
Let me know your thoughts
