Copper has made for a predictable victim in the US/China trade tiff. The iPath Series B Bloomberg Copper Subindex Total Return ETN (NYSEArca: JJC) is lower by 4.21% this month, but there could be some good news in store for the red metal, and it comes courtesy of the electric vehicle market.
Some analysts are growing concerned that global troubles could drag down the industrial metal as well. Along with the trade concerns, copper prices were weakening on softening global economic data. The base metal is a significant component in many industries, including construction, and is widely seen as a barometer for global economic health.
“While it is a known fact that electric vehicles (EVs) use about four times more copper than gasoline-powered vehicles, short-term demand for the metal won’t come from the car industry, but from the charging stations and related infrastructure needed to support EV growth, a new study shows,” reports Cecilia Jamasmie for Mining.com.
Watch For Copper In A Rock Tumbler
Copper has myriad industrial applications, and any slowdown in demand from the industries that generally support copper demand could send prices tumbling.
“According to Scottish consultancy Wood Mackenzie, there will be more than 20 million EV charging points by 2030, consuming over 250% more copper than in 2019. But the forecast would only become a reality if more private and public investment is allocated,” reports Mining.com.
Along with the trade concerns, copper prices were weakening on softening global economic data. The base metal is a major component in many industries, including construction, and is widely seen as a barometer for global economic health. Those scenarios increase the importance of support for copper from the booming electric vehicle market.
Related: Copper ETPs Reeling From U.S.-China Trade Wars
“In North America alone, the EV infrastructure market will total $2.7 billion by 2021 and $18.6 billion by 2030, according to the report,” according to Mining.com.
ETF investors sensing an opportunity in copper can also gain exposure to the metals and mining space through miner-related ETFs, such as the SPDR Metals & Mining ETF (NYSEArca: XME), which is designed to track the broad metals and mining segment, and the Global X Copper Miners ETF (NYSEARCA: COPX), which takes a more focused approach to copper miners.
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