The world is making a sharp pivot to ‘green energy’. One commodity that is crucial to that is copper. Copper is both relatively easy to shape and a great conductor. As electric vehicles, solar farms, wind farms and other renewable energies seek to replace oil and gas, copper is likely to be in high demand. According to the International Energy Agency, an offshore wind turbine requires 8 metric tons of copper per megawatt, and an electric vehicle car needs around double the amount of a regular petrol/diesel vehicle. Copper demand is set to more than double by 2040. See here for a fascinating report from the International Energy Agency on the role of critical minerals in clean energy transition.
Will this rise in demand give copper a natural bullish bias? If the answer is yes, then these seasonals for copper could offer a great time to buy into the base metal. Over the last 52 years, between November 23 and march 03 copper has gained 34 times for an average of 5.71%. From a seasonal perspective, this offers one of the best times to enter the copper market.
Major Trade Risks: If the Fed keeps hiking aggressively to contain US inflation and the global demand is badly hit, this can also hit copper prices.
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