COPX: Accumulate The Global X Copper Miners ETF As The Green Energy And EV Booms Begin

Summary

• A recent global acceleration towards pro-green policies is setting up for very strong copper demand in the decade ahead.
• USA, China, Europe, UK and parts of Canada are now, for the first time ever, all aligned with leaders strongly supporting green policies.
• Copper demand is likely to outstrip supply this decade, leading to higher copper prices and strong leveraged performance from the global copper producers.
• Goldman Sachs: "Copper’s current price strength is just the first leg of a structural bull market." Anticipates "resurgent demand and capped supplies leading to higher copper prices."
• A look at the Global X Copper Miners ETF.
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This article first appeared on Trend Investing on Dec. 11, 2020 when COPX was at US$28.95, and has been updated for this article.

As we begin 2021 the stars are aligning for copper demand. USA, China, Europe, UK, and parts of Canada are all moving in unison towards strongly promoting green policies; as are many other countries around the world. A key theme is towards supporting solar, wind, energy storage and electric vehicles [EVs]. All of this should drive very strong demand growth for copper this decade.

The Global X Copper Miners ETF (NYSEARCA:COPX) offers investors a simple way to play the trend with a bit of leverage and safety due to investing into a copper miners fund.

Global X Copper Miners ETF price chart

Source: Seeking Alpha

Copper

Copper price history - Copper is currently USD 3.61/lb

Source: Trading Economics

Goldman Sachs bullish on copper

Goldman Sachs very recently released a very bullish note on copper stating: “Copper’s current price strength is just the first leg of a structural bull market.” Goldman sees “resurgent demand and capped supplies” leading to higher copper prices. Seeking Alpha quotes the report stating:

“The copper market should head into 2021 facing the tightest market conditions in a decade owing to a substantial deficit, followed by continued tight markets into 2022 and 2023, Goldman says, adding it is “highly probable” that copper will test the 2011 record high $10,170/mt by H1 2022.” The US$10,170/mt works out to be US$4.61/lb.

Copper demand v supply

Copper demand

New copper demand this decade will be supported by new solar, wind, energy storage systems, electric vehicles [EVs] and EV charging stations. A fully electric car uses 4 times more copper than a conventional gasoline car and even more when we include the charging infrastructure.

Pro-green policies in USA, China, Europe, UK, and

Analyst’s Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The information in this article is general in nature and should not be relied upon as personal financial advice.