The copper industry is booming—here’s how you can get in early

(Alex Tepetidis/Unsplash)

Although the pandemic caused financial hardship for so many sectors, for a lucky few—e-commerce, video conference software, and healthcare, to name a few—business has been booming. 

But not all of them have fully flourished yet—some have been simmering beneath the surface, ready for a comeback once the world ramps up again. One of these industries, that’s been flying under the radar and steadily gaining momentum, is copper.

In fact, the red metal rose more than 22% in 2020, its best year since 2017. So what’s behind the soaring demand? Let’s take a look.

Supply and demand

There are a few reasons that copper is such a hot commodity right now. One of them is that there simply isn’t enough supply to keep up with the demand.

Analysts say we will need 10 million tons more copper to meet demand by 2030 and that a supply deficit in mines is a reality the world might face. With only 20 million tonnes being currently mined annually, it makes sense that interest in copper is surging.

Less coronavirus infections and more vaccinations also mean that more projects that require copper can start up again. Additionally, copper prices have also risen due to the fall of the US dollar, since that’s the currency that most copper deals are conducted in.

Rise in renewable energy 

One of the biggest reasons copper is in such high demand right now is that the renewable energy and electric vehicles industries—in which the metal is required in large volumes—are seeing such high growth at the moment.

The success of the electric vehicle (EV) industry is abundantly clear when you see how well Tesla is doing, and the fact that EV sales have grown by nearly 1 million in 2020.

And with every car company from VW to Audi also jumping on the bandwagon, demand is currently increasing at a very rapid pace. Given EVs use four times as much copper as gasoline-powered vehicles, demand for copper is a certainty.

Copper cabling is also required in a high volume in power plants, since they need cabling to transport energy due to their often remote locations, and copper is much more effective than aluminum. 

How to get in on the boom

Copper is definitely not a new industry, and with so many diverse uses for the metal, it’s easy to get lost in which company to choose to invest with.

A great place to start is to see where the supply is the largest. With Chile being the world’s largest copper provider, it’s a no-brainer to pick a company with a strong presence there.

Pampa Metals (CSE:PM) is an early-stage copper company that owns a massive eight projects in northern Chile, and 59,000 hectares of proven copper and gold mineral belts. Given the amazing location it’s in, the company has enormous upside potential.

Not only is Pampa one of the few junior companies with access to Chile’s coveted copper resources, but the company’s board also has over 100 years of deep knowledge and experience in the exploration and mining business in South America, Europe, and Australia.

The post The copper industry is booming—here’s how you can get in early appeared first on Market Buzz - Get informed about the companies early investors are buzzing about.

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