The Red Metal
A question for you: What's the first thing that comes to mind when you hear the words 'metals investor'? ...Gold? Silver? Platinum? ...You're not alone! But as the title of this blog already gives away, the metal in question is no other than ...<Drum-roll> ...copper!
Believe it or not, there's actually a growing market for the 'Red' metal as form of investment!!!
If Silver is the 'poor man's' gold, what the hell does that make copper?!
There's no denying that copper is a beautiful metal. In fact it's becoming increasingly popular in the kitchen where it gives a more affluent feel to an array of everyday kitchenware. But in terms of an investment for the guy on the street, is this really a viable alternative to the precious metals?
According to the U.S. Geological Survey, copper ranks as the third-most-consumed industrial metal in the world, after iron and aluminum, making up 0.0068% of the earths crust (ranked no. 26). To put this into perspective, iron makes up 6.3% (ranked no. 4) where as silver makes up just 7.9×10-6% (ranked no. 65). This suggest that whilst cooper is rarer than a number of other metals, it is by no means a truly rare metal. In light of this, should this really be considered as a sound form of investment?
In February 2016, the price of copper finally rebounded after more than 4 years of downward pressures. Today, the spot price currently stands at around $5,600 per metric tonne - only 65% of its 2012 price. This therefore suggests that there's still plenty of upside to this metal. However, does this make it a viable alternative to gold or silver?
If you're fortunate enough to have a large empty shed to store the metal, plus time on your side, then filling it to the brim with copper bars may indeed lead to significant gains. However, the upside to this metal just isn't in the same league as with the precious metals. Also, the logistical problem of shifting the metal also makes it problematic, should the investor want to offload their investment quickly.
My advice....whilst copper has visual charm (along with gold it is the only other metal that is not grey or silver in its elemental form) it is not a scarce metal. The plentiful supply therefore means that it is unlikely to make the investor the same sort of gains that the precious metals will at the peak of the next bull market. In a nutshell: if you're looking at buying copper bars as a substitute for the precious - think again, it's not worth it!!
Please note that this is just my opinion. I have an open mind and so if there's anyone out there that can write a compelling case for investing in copper bars/bullion then I'd be happy to hear from you.....
<if you liked this blog please upvote!!>
Pre-1982 copper pennies are the best way to invest in copper. They will always be worth 1 cent and if copper prices explode you can melt them down and sell them for scrap or maybe the scrap yard will take them off your hand for the pennies 'collectors values'
Agree! I was going to do a follow up blog on this. In the UK, pre 1993 pennies are 97% copper, gram for gram they are a far better value for money than copper bullion bars and are still money.... Thanks for reading!!!
I don't intend to buy any copper bullion anytime soon but I do save copper pennies (pre 1982) as they come along. And since we live on a finite planet maybe one day copper may become a decent wealth store.
Yes I do the same with pre 1993 UK copper coins, I don't have many compared to some but they are becoming less abundant in circulation...
Interesting post @dasczecher .My first upvote for you.greets from germany
Thank you sir!
For some reason "greets from Germany" has made me think of Eurovision.....hopefully I'll escape getting 'nil pois'!! LOL!!
If you expect an infrastructure boom somewhere red metal will go up, I dont see it hapening though. Zinc is good and will be good for a while
Copper is a required metal for pluming and electrical. Also, copper can be found all around you for face value or less.