Focus Stock of the Day (SCCO)

in #money5 years ago

Profit from EV Trend

A safer play on the electric-vehicle revolution is betting on higher cooper prices. A major copper supply shortage is on the way over the next several years. The London-based commodity-research firm that hosts the World Copper Conference reports copper demand will exceed supply within two years which could last for up to a decade.

The industry is reluctant to fund new mines meaning there will not be enough new supply to absorb the increasing copper demand for electric vehicles (EVs). Just in the U.S. the International Copper Association projects the number of EVs to grow from about 500,000 today to 7 million by 2025. Since electric vehicles require many times the amount of copper verse combustion engines we are going to need a lot more copper.

One way to take advantage is buying Southern Copper (SCCO), the fifth-largest copper producer in the world producing 1.9 billion pounds of copper. At copper price of $2.90 per pound, the company holds more than 70 million metric tons of reserves about 80 year life mine at current production rates.

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Copper prices have to rise for supply and demand to be in equilibrium. As prices rise Southern Copper's earnings will soar. Today is a great time to establish a starting position.

Disclosure: I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. The information provided should NOT be considered advice. The topics discussed are risky and have the potential to lose a substantial amount. I am not an investment professional and therefore do not offer individual financial advice. Please do your own research before investing.

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