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Copper future potentially exciting

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A random design assortment of one-ounce copper bars. (Image courtesy www.apmex.com)

Six years ago when silver was about to make its peak at just over $48 an ounce, coin shows became all about bullion.

Some firms began to sell copper rounds and bars as if they were a precious metal. My thoughts then were that if I wanted copper, I would simply buy pre-1983 copper cents. They were cheaper.

But these new copper items might simply have appeared a little bit early.

Back in the late 1960s, three-ounce silver bars had a brief time in the spotlight. Now the very idea of a three-ounce bar seems silly. But it was an example of the marketplace struggling to find what appeals to buyers.

What turned out to be appealing was one-ounce silver art bars. Not only did you get a standard weight, but you got a collecting theme with every bar you purchased.

They still exist today with their cousins, the silver one-ounce round.

If a market is to develop in copper, how would it evolve? Why would it evolve?

I have been reading recently about the trajectory of electric car production. Some forecasts put huge numbers of them on our roads by 2035. Where now I might think Tesla and expensive in the same thought, electric cars will become much more commonplace and affordable.

If this happens, demand for copper will soar. Apparently, electric cars need huge amounts of copper. They will scarf up more than current annual copper production.

With that kind of demand, what do you think will happen to the price of copper?

You guessed it. It will go up from the present $2.60 a pound. Will it go to $5? Will it go to $10?

Forecasting 18 years ahead, we might just go for broke, like forecasts for $100 silver and $10,000 gold.

On the other hand, electric cars don’t need catalytic converters in their exhaust systems. Demand for platinum will decline. What will that mean for its price, currently at $938 a troy ounce? Will it fall further behind the price of gold?

Such shifts in demand for metals would mean that we will be seeing more and more copper offerings on bourse floors in the future. They will also be offered for sale on precious metals websites.

Copper can currently be found on one popular bullion website that I like to look at, APMEX, but you look under “Other Items” to find it. I expect $10-a-pound copper would promote the metal to having its own header.

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Copper rounds are struck with designs of old coins. The 100-ounce copper bars look like early silver bars from the 1960s.

The upshot of all this is if you believe progress will take us to large numbers of electric cars on our roads, then it might pay to look at copper offerings now.

Perhaps there will be a copper bar craze in the 2020s or 2030s like there was a silver art bar craze in the early 1970s.

There is no telling what might happen. But if you like the idea of being a pioneer, get ready now for what might be a much more exciting future for copper than what we have seen so far.

 

This article was originally printed in Numismatic News. >> Subscribe today.

 

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