Copper Price Shines: Is it Too Late to Invest?

Frank Holmes says Ivanhoe Mines (TSX:IVN) remains his favorite way to play the copper price rally

Frank Holmes | May 13, 2021 | SmallCapPower: Iron ore and copper are both near record highs on tight supply and strong demand from China. Copper price traded above $10,000 per tonne last week, its highest level in 10 years, as investors anticipate further supply constraints on global efforts to decarbonize and electrify everything.

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To give you some idea of what I’m talking about, the NAHB last week recommended to homebuilders that they should start pre-wiring new houses for electric vehicle (EV) charging. That calls for more copper wiring in the home as well as the vehicle.

Several car manufacturers have already announced they’ll be phasing out internal combustion engine (ICE) vehicles in favor of EVs between 2025 and 2040. As I’ve mentioned before, EVs require three to four times as much copper wiring as a traditional vehicle. Morgan Stanley reports that ICE vehicles use around 50 pounds of copper on average, compared to 85 pounds for a hybrid and as much as 183 pounds for an EV.

Ivanhoe Mines (TSX:IVN) remains our favorite way to play the copper rally. The company, which reported phenomenal production results in early April at its Kamoa-Kakula project, has yet to report first-quarter earnings. However, other copper companies have, and results so far have been amazing. Brazil’s Vale S.A. (NYSE:VALE), for instance, reported incredible net income of $5.6 billion, well above Wall Street estimates.

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