Copper Stocks Basics
One hot topic when it comes to metal trading at the moment is copper stocks. Copper companies in general engage in exploration, extracting, and production of the metal. When thinking of copper, pennies are what come to mind for many but it has much more potential than the surface level. This metal is also the third most used metal in the world. At first when the pandemic began, copper was in a lot of trouble. The value of copper stocks went down drastically when this occurred. But then, the copper market was able to bounce back for a couple of reasons. The first of which, is the worry for supply. Copper is used in so many markets that people feared a shortage of the metal. It also experienced an increased demand in China as a result of it being needed there.
China is one of the largest markets for copper. Copper is used in electronics, wires, power generation, construction, and more. Copper stocks usually trade based on the performance of the Global X Copper Miners ETF. The COPX ETF has provided a return of over 50% in the last year for investors of the metal. Currently, the price of copper is at about $7,800 per ton. There are a few things to look for if you intend on investing in copper stocks. The first of which would be the volume of a copper stock, which can sometimes show which direction it may be moving in the future.
Copper’s Trading Volume
The trading volume for copper stocks at the moment is rather high. This metal is not as valuable as silver as gold, but is a very valuable metal for the economy. Most wires are made from copper. Copper is the most cost effective conductor for electricity out there. The companies associated with copper often will search for silver, gold, and zinc too expanding their portfolio.
Electric Vehicle Stocks and Copper Stocks
The market for electric vehicle stocks has exploded in the last decade. Especially in the last five years, the production and sales numbers for EVs have drastically increased. There is already more than 5 million electric vehicles on the road in 2021. The largest electric vehicle producer, Tesla, delivered more than 500,000 electric vehicles in 2020 alone. As you may know, electric vehicle stocks have experienced a large rally in recent times, especially in 2020. So where does this place stocks that are related, such as copper stocks and lithium stocks?
Today we are going to focus on the impact of copper on electric vehicles. Copper is used in various EV components, which could not be replicated with other metals. Copper is additionally used in charging stations and supporting infrastructure. The reason that this metal is chosen over others is because of its high conductivity, durability, and efficiency. With the demand for electric vehicles increasing in the market constantly, this also increases the demand for copper in this sector.
How Much Copper Is Used In Electric Vehicles?
Your everyday car has anywhere between 18-49 pounds of copper in them. If this sounds like a lot, just wait until you hear how much electric vehicles use. Let’s start with hybrid electric vehicles, or HEVs. These vehicles use about 85 pounds of copper per vehicle. Plug-in hybrid vehicles or PHEVs use 132 pounds of copper per vehicle. Now we are moving towards EVs. Battery electric vehicles use roughly 183 pounds of copper per vehicle!
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Compare that to the amount that is used in regular gas powered cars and you can see how the demand for copper is growing. It gets even wilder from there. A hybrid electric bus contains nearly 200 pounds per vehicle. But there is one of these vehicles that uses much more than the other. That would be a fully battery electric powered bus. This type of bus is estimated to contain more than 800 pounds of copper within, mostly used in the battery.
Many consider to be copper one of the main components in electric vehicles. Its conductivity, durability, and malleability make it very ideal for the batteries used in EVs. In fact copper is used in nearly all of the major components of an electric vehicle. The metal is used in the motor, inverter, wiring, battery, and more. There is about a mile of copper wiring in most electric vehicles. The only metal that comes close to copper would be aluminum. That metal is a fraction of copper’s price, but would require double the amount to do the same job that copper can do. This is what makes copper the best metal for electricity conduction in electric vehicles.
The Future of Copper Stocks and Electric Vehicle Stocks
Sales for electric vehicles are expected to move upwards more than three times the current sales by 2030. That doesn’t mean that copper stocks and EV stocks won’t move up sooner than that though. This has been shown in the last year as both of these stocks have increased in market share significantly. Electric vehicles are being adapted by so many automakers at the moment. Tesla (NASDAQ: TSLA) is continuing its lineup with the Cybertruck and Model Y. General Motors Co. is releasing a fully electric Hummer in the next year. Toyota is also producing a new EV. The list goes on and on, there are so many large automakers diving into the electric vehicle market.
The world is pushing for a more sustainable and energy efficient future at the moment. Copper’s demand in the market will continue to grow with time as long as the electric vehicle sector does as well. Copper has a huge part to play in this market. This metal is being used to increase the efficiency of plentiful electrical technologies. Whether its motors, transformers, batteries, wires, or solar energy systems, this versatile metal is proving to be a strong asset. This has attracted many investors to copper stocks that may have not considered them to be a good investment before. Not to mention that copper itself is a rather sustainable material. It is one hundred percent recyclable, and can also be reused without losing its engineering traits. That is what makes copper stocks such an interesting sector to watch progress at the moment.
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