Oxford reckons copper will lead the electrifyin’ revolution. Here are some ASX stocks to watch
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The global green energy revolution will boost demand for copper as cars and trucks switch fuel from petrol to electricity.
The red metal is well placed to benefit because it has very few close competitors for industrial electricity transmission, according to Oxford Economics.
Meanwhile, years of low prices (and more recently, COVID-19) has slowed investment — thinning the pipeline of mining projects on the horizon.
Copper demand will benefit from electrification in two ways, Oxford says.
First, EVs – which contain significantly more copper than traditional vehicles already – are expected to need bigger batteries to provide adequate power and range.
“Those bigger batteries mean copper’s use in wires and motors needs to be significantly scaled up and should double or triple per vehicle,” Oxford says.
With sales of EVs growing far more rapidly than traditional cars, the boost to copper will inevitably be amplified.
Second, copper will benefit from a massive build-out of charging stations for EVs.
The EU has a €20bn ($31.5 billion) green energy plan to increase the number of public charging stations from 170,000 in 2020 to 2 million by 2025, Oxford says.
“Some of this extra infrastructure will also boost aluminium demand (the light metal is used for overhead power lines), but significant amounts of extra copper will also be needed for power cables.”
And don’t forget wind and solar power — some scenarios suggest that solar alone may need an extra 20 million tonnes of copper by 2050, which is equal to current global output. Ridiculous.
Here’s how a bunch of ASX-listed copper-exposed stocks are performing.
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