Dear Friend,
Copper is about to go through some things. The math just doesn't work out any other way.
Here's what I wrote to my New Energy subscribers on Friday (it's so important that I had to share it with you, too):
Copper will be the new oil in an electric world. It’s one of the main commodities we see benefitting from our “for the good” investing strategy. But the copper price fell 30% from April to mid-July. That was due to a resurgence of COVID-19 in China. They went back into lockdown and snarled up the supply chain again.
We see that as an opportunity to buy the future of energy at a discount today.
Even the most bearish energy predictions show an increase in copper demand. Energy forecasters Rystad Energy project a 6 million-ton deficit by 2030. They see copper demand rising 30% by 2030.
But unlike oil, it takes years to develop a new copper mine. Demand comes quickly, but mined supply comes slowly. That’s why the price will soar.
But I think the copper price will react less like the oil price and more like the palladium price.
You see, palladium is a critical metal for the auto industry. It is a catalyst - which means it helps chemical reactions go fast and smooth. In its case, it catalyzes gasoline combustion. That reduces harmful compounds in car exhausts.
And over the past twenty years, demand for palladium soared as demand for cars in China and elsewhere soared. But palladium isn't common and supply couldn't meet demand...which sent the price up 3,100% over that period.
Here's what the chart looks like:
The crazy thing is that this didn't impact our demand for cars at all. Because palladium is just a small part of a car. And that's what will happen with copper, in a much shorter time frame.
It's all about electrification. And in New Energy, we're building a portfolio to take advantage of that trend.
If you'd like to learn more about Mangrove Investor's New Energy, click the link here and watch the video:
We just added a monthly subscription option just for you. We aren't offering it to anyone else, just my friends on the Blog.
But even if you don't subscribe to New Energy, make sure you plan for the copper run. Find some good projects and some production, put them in your portfolio and ignore them.
You can send me a thank you note in 2023!
Sincerely,
Matt Badiali
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