Copper Prices - Oct 11

[dan_s]

"Copper Demand Is Now Generational, With Some Miners Surging 200+% Year-to-Date" by Metals Market Research

I have added Ero Copper (NYSE: ERO) to our Small-Cap Growth Portfolio

From the article above:

Do you have any idea how important copper is in 2021?

Buckle up. Because you’re probably using it now without realizing it. This could be one of the top investment trends of this year and beyond, and if you didn’t know why before, you’re about to learn real quickly.

As of October 8, 2021, we’ve seen copper mining giants like Freeport-McMoran pop 107.72%, and Capstone Mining skyrocket 236.88% over the past 52-weeks. Meanwhile, the Global X Copper Miners ETF, an index of copper miners, easily rallied 54.48% in comparison in comparison to the S&P 500 Index that is up ~16.9% YTD.

Physical copper also touched a record high earlier this year of $4.90/pound in May. < The front month copper futures contract is trading at $4.38/pound at the time of this post.

Here’s why.

Despite mounting economic headwinds, including inflation, supply chain issues, and a global energy crisis, copper may not only be immune. It could thrive.

If the Fed tightens its monetary policy in a matter of weeks, fear not. Copper, and especially those who mine it, could win the day.

Copper may be strong a play as any during these times. Traditionally, this metal is considered a strong play when inflation and economic activity heats up because its day-to-day properties are essential. It conducts heat and electricity and is malleable. It’s commonly used in electrical equipment such as wiring and motors. It’s also valuable for construction (for example, roofing and plumbing) and industrial machinery (such as heat exchangers).

Not to mention, computers and other electrical devices use significant amounts of copper. Copper wiring is also likely powering wherever you are and probably behind all of your pipes and plumbing.

An especially pressing potential catalyst for copper is how many consider it “the king of the ‘green metals’” and a crucial component of solving the world’s most pressing environmental quandaries. “Almost every single solution drives you to copper – solar power, wind power, hydro power, and pure electric and fuel-cell electric vehicles,” said founder and executive co-chairman of Ivanhoe Mines Robert Friedland in a joint statement with non-executive co-chairman Yufeng “Miles” Sun.

According to Global X ETFs, “Cleantech and renewables projects, as well as infrastructure development, represent significant growth opportunities for copper, with substantial amounts of copper required to rebuild modern infrastructure and energy systems.”

As copper demand sees more momentum, mounting potential catalysts have set prices up to break higher once again.
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I decided to add ERO to our portfolio because it is extremely profitable with a cash cost of just $0.80/pound of copper it produces. You can find my recent profile on the company under the Small-Cap tab on the EPG website.