Don’t Listen to Wall Street — Now Is the Time to Buy Copper Stocks
There’s no denying it: Renewable energy and electric vehicles (EVs) are going to change the way we live … and they’re going to need copper to do it.
When it comes to renewables and EVs, Copper has two main uses:
1. It generates renewable energy from solar, hydro, thermal and wind energy.
2. And in EVs, it converts electrical energy into mechanical energy.
By 2030, we will need an extra 2.65 billion metric tons of copper per year. That’s about 15% of the world’s current production — equal to the annual production of Peru, the world’s second-largest copper producer. We have 10 years to find, develop and produce a volume of copper equal to the output of Peru…
In other words, a shortage in copper is coming.
Copper Price Decline
You would never know this based on the spot price of copper. From 2018 to today, it’s fallen 21% from its high of $3.33 per pound. Copper stocks are down even more…
Copper miners Southern Copper Corp., Freeport-McMoRan Inc. and Turquoise Hill saw shares fall 37%, 50% and 68%, respectively. And the market is so concerned with headlines that it isn’t doing the math.
Wall Street hasn’t priced in the coming copper shortage because it is preoccupied with Brexit, the U.S.-China trade war and the prospect of war in the Middle East over the Iranian sanctions. Wall Street traders believe the world economy will get worse before we need all that copper, so the market priced in a decline in demand.
A Contrarian View
This is an ideal situation for a contrarian investor — one who knows that the rise in copper demand is inevitable, and that the current fear in the market is only temporary. This is the best time to buy natural resource stocks.
You need to buy the major copper producers for pennies on the dollar … while you still can. Don’t let Wall Street’s short-sighted worries stop you.
Once the market realizes we’re out of this metal, the price will skyrocket. And you’ll be glad you went against the grain.
Matt Badiali, Editor,
Real Wealth Strategist