I don’t need to tell you Australia is at the tail end of one of the biggest mining booms in history.
Yet while demand continues, prices are far from peak levels. It’s why many commentators have called it the end of Australia’s commodity boom.
Copper price set to rise
But it won’t be long before Australia experiences yet another surge in commodity prices. Infrastructure spending and new technology will drive demand for Aussie commodities, in particular, copper.
In their June 2017 copper outlook, National Australia Bank Ltd [ASX:NAB] said copper consumption will continue to be driven by China, into the future.
China uses copper for their various infrastructure projects and other electrical purposes. But soon, they’ll be using copper for a completely new emerging industry — electric vehicles (EVs).
Source: Seeking Alpha
China leading the way
Unlike many nations, China doesn’t just want EV’s. They need them.
As more newly rich Chinese flock to urban areas, demand for cars and other goods will grow. But more petrol cars on the road is the last thing China wants. Their cities are heavily polluted, sometimes causing deaths.
It’s why the government is trying to develop EV technology as fast as possible. ‘As a country, China has three fundamental paths it may follow,’ Forbes writes:
‘First, it can choose to live with a rapidly growing number of ICE powered vehicles on its roads, with all that implies as far as air pollution and energy independence.
‘Second, the government can restrict the transportation choices of its citizens in an effort to balance environmental concerns.
‘Or third, the country can embrace EV technologies that enable its citizens to have their cars without jeopardizing air quality in its cities.’
China already has the largest automotive market in the world. The 28 million vehicles produced in 2016 is expected to grow to 35 million by 2025. And around one fifth of those will be alternative fuel vehicles such as, EVs and hybrids.
That’s seven million EVs, which contain hundreds of kilos of copper. Take a look at how much copper is needed in various EVs below:
Source: Seeking Alpha
If you don’t want to miss out of Australia’s next commodity boom, check out these top 10 Aussie mining stocks.
Junior Analyst, Markets & Money