Copper - Just the BeginningCopper futures broke out of their wedge this week, with per tonne prices breaking the $10,000 milestone. Names such as Freeport-McMoran (FCX) are benefitting from this, while TRQ is on discount due to. setback in their mining process. Despite Fed tapering, copper is strong, surprisingly. I believe that now is the time to get in "The New Oil", as stated by Goldman Sachs, who gives the commodity a 50% upside before 2025. If copper moving 10% has resulted in Freeport going from $30 to $39, think of what will happen if Goldman and the rest of the Street is right...
Thesis:
Goldman Sachs recently published a note declaring copper "the new oil," and forecasting it could reach $15,000 (50% inc.) by 2025 as the world transitions to clean energy.
As the movement to sustainability/clean energy progresses, the exponential increase in demand for copper will outrun supply due to slow mine creation, centralized property rights.
Although it may take a few years and experience some drawdown, depleted inventories and a demand spike will likely cause the price to rise significantly over the next decade, with Bank of America suggesting a possible 100% increase to $20,000 per metric ton by 2025.
Overall sentiment on the Street is extremely bullish in the mid-to-long-term.
