Copper markets could get red hot.
With infrastructure plans, and an aggressive push for renewables, copper prices should push higher. For one, remember, “Copper will be crucial in achieving decarbonization and replacing oil with renewable energy sources, and right now, the market is facing a supply crunch that could boost the price by more than 60% in four year,” reports Business Insider.
Electric vehicles, for example, use four times as much copper as petroleum-based cars.
Two, according to Goldman Sachs, copper is “poised for another leg” higher as headwinds fade, and demand increases. The firm also believes the copper market is still tight, and says we could see a 430,000 tonne deficit by the second half of the year.
By 2022, they added, we could run into a 200,000 tonne deficit.
Three, the other problem could be Peru and Chile.
At the moment, the two account for nearly 40% of global copper production. Unfortunately, they may force miners elsewhere, given plans to potentially raise taxes on copper mining.
Look at Chile for example.
According to Bloomberg, “The world’s top copper-producing nation has long been one of the most reliable mining jurisdictions. Yet lawmakers in pandemic-scarred Chile’s lower house have just approved a progressive royalty on copper sales so onerous that it is described by miners as “akin to expropriation.”
With that in mind, there’s still plenty of time to invest in copper stocks, such as Freeport McMoRan (FCX), Southern Copper (SCCO), BHP Group (BHP), and Riot Tinto (RIO). You may also want to keep an eye on the Global X Copper Miners ETF (COPX).
The post The Top Ways to Trade a Red-Hot Copper Rally appeared first on Morningology.
