The battery metals trade shows no signs of slowing down, with participants and investors all along the chain still seeing rewards.
The price of lithium carbonate is still punching above previous record highs. It now sits at more than A$118,667 per tonne, the highest on record.
Within the trade are other metals — nickel, copper, and cobalt. They are trading up 14% and down 18% and 8% on the previous 12 months, respectively.
Copper still a crowd favourite
It’s typically lithium stealing the show in the battery metals space – and, by extension, electric vehicles (EVs) space. However, copper, the industrial metal, is also worth a mention.
Decarbonisation is set to spur a period of high demand for the metal, according to Livewire. Rob Crookston of Wilsons Asset Management writes that “[l]arge quantities of copper” will be needed in the transition to renewable energy.
“EVs typically require around 3x more copper than comparable conventional internal combustion engine vehicles,” he said. He added:
Solar and offshore wind require an estimated 2x and 5x, respectively, more copper per megawatt of installed capacity than popular fossil fuel energy sources.
Therefore, we expect there to be an abundance of demand for copper over the long term.
With that, Livewire notes that OZ Minerals Limited (ASX: OZL) is Wilsons’ preferred copper play.
Crookston, Wilsons equity strategist, says that OZ is “one of the purest large cap exposures to copper on the ASX”, scoring approximately 70% of revenues from the metal.
Wilsons is also attracted to OZ’s quality assets that are set to have extensive lives, located in the stable jurisdiction of South Australia.
Not to mention the company can potentially increase production by more than double with its upcoming projects, Crookston says.
“OZ recently rejected an indicative takeover proposal from BHP at A$25 per share. We remain optimistic that further bids will emerge at a larger premium,” he finalised.
OZ has had a challenging year on the chart and remains down 13% this year to date.