Are copper coins a good investment plus#

When copper prices are low, firms can accumulate a lot of debt since the necessary capital investment is so high and the company may not have enough cash flow.īecause copper is a capital intensive industry, they have a lot of depreciation and amortization on their financial statements. If the ratios of debt to assets or debt to equity are out of bounds as compared to the rest of the industry, that is a warning sign. If you are going to invest in copper mining securities, it’s important to look for high leverage ratios. However, copper can be used as a hedge against inflation. Copper is also heavily traded in the commodities and futures markets, which could mean price volatility. moves toward improving its infrastructure, copper will be in even more demand. Developing countries, especially China and India, are big users of copper due to their infrastructure needs and China is the world’s largest importer of copper. 1 due to copper mining, but it has the most copper reserves. The various supply issues increase copper’s price volatility.Ĭhile is the world’s largest producer of copper, followed distantly by Peru. There are also labor issues that have been a factor and could be in the future. Many mines were shut down during the coronavirus pandemic, which hit the supply of copper hard. In addition, copper has some supply issues that are a potential problem. To extract that tiny fraction of marketable ore entails a process that is highly capital intensive. Copper deposits are often only 0.05% to 1% copper ore. Once it is in circulation, it has numerous uses for which it can be recycled. One of the reasons is that copper is recyclable. We have mined only a fraction of the world’s supply of copper. The Copper MarketĬopper is both versatile and plentiful. All of this leads to a potential increase in copper demand and even more interest from investors.

Hospitals are changing many surfaces that you can touch to copper since viruses and bacteria cannot live on the metal. Any uptick in economic activity usually fuels home building and sales from which copper will benefit. Charging stations for electric cars and many future infrastructure improvements will need copper. Electric cars will have more copper in them than gasoline-powered vehicles. To find out Cook’s stock picks, watch the above video.Among the commodities known as industrial or base metals, only iron ore and aluminum are more in demand than copper. Homes have copper in the air conditioning units, water pipes and appliances. So certainly nickel, copper, cobalt, that’s where money is coming in and available for exploring and building.” That’s where the money is starting to flow into. “I’ve spoken with a number of large funds and private equity groups that are looking to invest in the sector, but it has to have a green component to it,” he explained. However, Cook said that financing for mines is available for so-called “green metals.” “I think we are going to see margins decrease across the board, in every industry, not just mining,” said Cook. This, along with higher input costs in oil, labor, and supplies, could mean shrinking profit margins for commodity producers. So, I think that’s a positive for gold as well.” dollar, and that’s going to happen over this year. And I think we’re going to see more non-Western countries start putting gold in their reserves as opposed to the U.S. He also said that gold would benefit from recent geopolitical events, as opposed to the demand for electrification.

Are copper coins a good investment plus#

Gold looks good.”Ĭook spoke with David Lin, Anchor and Producer at Kitco News, at the PDAC 2022 Convention in Toronto.Ĭook explained why he had believed strongly in copper and nickel, saying, “The whole electrification relies on those two metals plus lithium… We don’t have enough copper supply to meet with the coming demand.” “I’m very certain that the copper price is going to do well,” he said. As we head into a ‘recapitulation’ stage for commodities, copper, nickel, and gold will be the best assets to own, said Brent Cook, Founder of Exploration Insights.