Story Highlights

  • Demand for copper is set to soar in the coming years.
  • Back in 2011, when demand for copper surged, prices doubled.
  • Electric cars and renewable energy will increase the demand for copper.
  • Click here to learn more about the growing demand for this metal.

The world’s supply of copper is running low. This comes at the same time that demand is set to soar.

The last time there was a copper shortage, the price doubled to $4.50 per pound. That’s 65% higher than today’s price of $2.50 per pound.

But the coming shortage in copper will be even more severe. Within two years, there won’t be enough copper for the coming demand.

Within the next five years, the world will be in a chronic copper deficit. Beyond what we saw in 2011.

I’m going to tell you why investors are preparing for a once-in-a-generation opportunity. And why you should too.

Electric Vehicles: Over 126 Million by 2030

Back in June, I told you how automakers are all in on electric vehicles (EVs).

Major automakers are plowing $60 billion into developing EVs. It’s only a matter of time until EVs displace combustion engines.

The International Energy Agency expects over 126 million EVs to hit the roads by 2030. This new wave of cars will also lead to the build-out of charging stations across the country.

These alone will require millions of tons of copper to keep the next generation of electric transportation moving.

The tsunami of EVs will reshape energy demand. Electric cars draw power from the grid, requiring new energy sources.

Renewable Energy Drives the Copper Shortfall

By 2050, renewable energy sources will make up 62% of the world’s power. That’s according to Bloomberg’s New Energy Outlook 2019.

Renewable energy needs much more copper than current technologies. Solar and wind power sources need four to six times more copper than fossil fuel sources.

By 2050, power generation will move away from multigigawatt-scale power plants such as coal and nuclear. And it’ll shift to smaller wind and solar power plants.

The graphic below breaks down exactly how we’ll generate power by 2040.

These sources require huge amounts of copper.

Solar panels use 5.5 tons of copper per megawatt. Land wind turbines use 3.9 tons per megawatt, while offshore wind turbines use 10.5 tons of copper!

Those generation technologies need new sources of energy storage in the form of giant batteries. That way, the grid can still draw power at night and on calm days.

The Next Generation of Mega Batteries

Renewable energy sources are becoming cheaper, but they hold one real drawback. Their energy sources aren’t always available. Wind can stop blowing and storm clouds can block out the sun.

Electric providers are turning to utility-scale batteries to combat these shortfalls. These semitruck-sized batteries hold the excess charge from renewables and release it when needed.

By the end of this year, there will be roughly 1,000 megawatts of utility-scale battery capacity. That’s enough to power roughly 1 million homes.

The chart below shows the coming demand for utility-scale batteries:

By 2021, utility-scale batteries will have the capacity to power about 2% of U.S. homes. Roughly 2,500 megawatts of new energy storage will come online in the next two years.

And these new batteries use a lot of copper, too. Depending on the battery type, these batteries require more than 500 pounds of copper per megawatt of capacity.

2 Ways to Play the Growing Copper Demand

All that said, the world will need an additional 1.1 million tons of copper in 2020. That’s nearly a 5% increase from 2018.

And that demand is only going to keep rising.

Analysts from Fitch Solutions forecast total copper demand to grow by 27.9% by 2027.

That surge shows no sign of slowing down as EVs and renewable energy become more mainstream.

But that boost in demand will meet tightening supply. Analysts point to a supply deficit of 2,363 thousand tons. That’s about 10% of the current yearly consumption.

Readers of our Real Wealth Strategist newsletter received two exclusive reports this week. We shared with them our top picks for profiting from the “anti-element’s” surge in demand.

You can click here to learn more and subscribe.

Recently, my colleague John Ross wrote about capturing gains of 32% and 71% by trading copper using a newly developed system that our team calls “Buy on Black.”

You can learn more about the “Buy on Black” system here.

Good investing,

Anthony Planas

Internal Analyst, Banyan Hill Publishing

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