Weekly Update: Copper Is on the Move
Good evening, and welcome to this week’s edition of Stealth Trades!
After a long consolidation period, copper is finally breaking out and pushing higher.
Copper is a crucial element in the AI data center supply chain. Without it, America’s dreams of artificial intelligence domination never materialize.
There’s just one problem….
We don’t have enough of it. And supply is projected to come up short by 25 over the next 5-10 years.
This is creating a real crisis, and potentially a huge opportunity for investors.
I have been long copper since the start of the year. This, to me, is one of the big asymmetric investment opportunities of the decade.
Because this is not an easy problem to solve. It takes 15 to 20 years to bring a major copper mine online. If we started today, they wouldn’t produce meaningful copper until the late 2030s.
Plus, the easy copper is gone.
Grades that were once 5% are now 0.5%. We’re moving mountains for slivers of metal.
And it’s not just AI infrastructure driving up demand. We’re electrifying everything.
An EV uses three to four times more copper than a gas car.
Wind turbines use four to five times more copper per megawatt than coal.
Meanwhile, the power grid itself is ancient. The US is investing over $400 billion upgrading it.
By 2030, grid demand alone could reach 15 million tons of copper.
Today, copper is worth just over $6 per pound. I expect to see at least $20 a pound in the coming years.
And if that sounds over the top, it’s not. If anything, it is a conservative estimate.
Copper prices soared over 500% in the early 2000s. Since then, prices have gone essentially nowhere – 20 years of stagnant commodity prices.
But that is likely about to change…
Those wishing to get exposure to copper have several ways to do so.
If you’re looking to go in with size, futures contracts (HG) are 25,000 pounds apiece.
An easier way is to buy the US Copper Index Fund, ticker CPER. This is direct commodity exposure for about $38 a share.
You could also buy copper mining stocks. COPX is the symbol for the Global X Copper Miners ETF. It contains a basket of copper mining stocks that will benefit from higher copper prices.
Either of these ETFs would make a great long-term hold in my opinion.
Best wishes for your trading,
