Categories: Stock Market
Topics: Copper Stocks

Positioning for Gains in the 2024 Clean-Energy Commodities Boom

Welcome to 2024 — the year of the clean-energy metals commodities boom. 

This is one key area of the market we’ll be positioning in over the coming months as multibillion-dollar green energy projects are put in motion across practically every continent.

That includes:

• America’s largest-ever renewable energy infrastructure project: The SunZia transmission line in New Mexico.
• India’s massive $2.26B Khavda Renewable Energy Park: one of the largest renewable energy projects ever constructed. 
• China’s 400GW wind and solar park: the largest renewable energy project in human history.

Green energy projects of this magnitude are popping up everywhere — putting a considerable strain on clean-energy metals — as the world collectively seeks to wean itself off of fossil fuels in favor of renewable energy sources.

One particular clean-energy metal we believe is set for a major rebound in 2024 is copper. 

Copper is "THE" metal of electrification... making it absolutely essential to the global energy transition.

The bottom line is that, when it comes to electrifying something and transmitting electricity, you need copper — plain and simple. 

And that means everything from wind and solar power generation, EVs, consumer electronics, and the revamping of global electrical grids. 

Wind energy alone requires 2,000 tonnes of copper per gigawatt on average. Solar needs even more; about 5,000 tonnes of copper per gigawatt. 

And it’s being projected that global electricity grid capacity needs to double by 2050 to meet net-zero targets with an estimated cost of roughly US$20 trillion to achieve that.

What it all adds up to is a massive strain on the global copper supply as we enter the new year.

The Oregon Group recently published a report stating that 427Mt of copper will be needed by 2050. That’s more than 8X current demand for wind turbines, solar panels, and energy storage combined.

That same report highlights that, in order to meet those targets, annual investment will need to increase from US$274 billion in 2022 to US$1 trillion by 2050. 

McKinsey & Company says that for the world to meet its net-zero emissions targets, it will be short 50Mt of copper by 2030.

There’s simply no disputing the fact that the global energy transition is highly dependent on an ample supply of one key metal: copper. And so, the question begs...

Will there be enough of the red metal available to meet escalating demand as the world goes green?

If you ask Goldman Sachs, the answer is a resounding “no.” Analysts there are now predicting a copper deficit of over half a million tons in 2024 due, in part, to global copper mining disruptions.

Underpinning those concerns, First Quantum Minerals was recently forced to halt production at its Cobre Panamá Mine in Panama — one of the world’s largest copper mines — following a Supreme Court ruling. And major copper producer Anglo American has announced that it will cut copper output this year and next year as it seeks to cut costs.

Analysts from Goldman Sachs, who now see copper prices hitting US$10,000 per ton within the year and much higher in 2025, say, “The supply cuts reinforce our view that the copper market is entering a period of much clearer tightening... Our confidence that copper substantially re-rates into 2025 [of $15,000 per ton average] is now substantially higher.” 

The twelve-month copper chart (below) shows that copper prices are already beginning to inch higher in anticipation of the looming supply crunch many analysts and industry experts are predicting.

That upward price trajectory looks to be further supported by what analysts are anticipating will be a weaker US dollar in 2H 2024 as the Fed pivots from tightening to easing. 

A pivot to rate cuts will serve to weaken the US dollar, making greenback-priced copper more attractive to foreign buyers. 

Hence, with a broad set of tailwinds forming for the red metal as we kick off 2024, the key move for seasoned contrarians will be to position early and low BEFORE the next leg up in the copper price.

We cover that and a whole lot more in our brand new report on clean-energy investing in 2024. 

It’s the work of our own Nick Hodge of Foundational Profits and includes his Top-4 Picks from the clean-energy space.

With select green energy metals such as copper, uranium, lithium, and rare earths set to rise in 2024... it’s a clean-energy profit-guide you simply do not want to miss as we kick off the new year.

Yours in profits,

Mike Fagan
Editor, Daily Profit Cycle