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Copper’s Key Role in Europe’s Green Energy Plans

Here’s a breakdown of what Europe’s green agenda could mean for copper, whether the region can meet its own supply needs and what analysts say about the challenges ahead. 
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The essential role of copper in economies around the world is well known, but as governments continue to shift toward green energy, what could be in store in the long term for the metal? 

As the world moves away from fossil fuels, battery metals such as lithium and cobalt are getting attention for the essential roles they play in electric vehicle (EV) batteries. But copper also has a prominent place in the green energy future.

Europe in particular has pledged to be climate neutral by 2050, with electrification of transportation at the center of its plans to make this goal a reality.

 

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Here the Investing News Network (INN) gives a breakdown of what Europe’s green agenda could mean for copper, whether the region can meet its own supply needs and what challenges analysts see ahead.

Copper for Europe’s plans

The EU has set an ambitious green agenda for the next decades, including becoming carbon neutral by 2050. To reach these goals, mining is essential, and metals such as copper will be key.

A well-known base metal for most investors, copper is used primarily in construction due to its conductivity. In fact, according to the International Copper Study Group (ICSG), more than 40 percent of all copper production ends in this sector.

However, as governments push forward with the electrification of transportation and the use of energy storage as ways to reduce carbon emissions, copper uptake in this segment is expected to surge.

When looking at the plans outlined for electrification in particular, there are three main areas where copper is needed: in the production of EVs, in charging stations and in energy storage.

In 2020, Europe became the leading region for EV sales, with a total of about 2 million sold despite the uncertainty brought by the coronavirus pandemic. The outlook for 2021 remains bright for the sector, and most analysts agree the uptick in demand is set to continue.

According to Wood Mackenzie, EVs can use up to three and a half times as much copper when compared to internal combustion engine (ICE) passenger cars, while a fully electric bus could use between 11 and 16 times more copper than an ICE passenger vehicle, depending on the size of the battery and the bus.

The amount of copper needed in Europe to meet future EV demand will depend on what type of EVs are taken up by consumers. Different vehicles, such as battery electric vehicles (BEVs), hybrid electric vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs), have different intensities, Eleni Joannides of Wood Mackenzie explained to INN.

According to the research firm, ICE vehicles use approximately 22 kilograms of copper, while HEVs use 40 kilograms, PHEVs use 55 kilograms, BEVs use 80 kilograms and battery electric buses use 253 kilograms.

Aside from that, copper use is not only limited to EVs — as mentioned, the metal is also needed in EV charging stations and infrastructure.

Looking at some numbers on infrastructure, by the end of 2020, there were a total of roughly 285,000 public charging outlets in Europe serving a fleet of around 3 million plug-in electric cars. That’s close to one charging outlet per 10 electric vehicles, which is the optimum level that the European Commission recommends, Luke Gear, senior technology analyst at IDTechEx, told INN.

“Up to 90 percent of EV owners in Europe also have access to private charging,” he said. “As the EV market matures, there will be more reliance on public charging as more lower-income households without home charging options become EV customers in the coming decade.”

 

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IDTechEx predicts that a total of 1.7 million public outlets will come available by 2031 in Europe, with copper expected to remain an essential material for cabling and power electronics over the period.

“We don’t see copper being displaced in cabling and power electronics in the foreseeable future,” IDTechEx’s Gear said. “Moving to higher voltages and wide-bandgap semiconductors in DC fast charging will enable downsizing of overall packages and cabling, which would reduce the amount of copper used per charger, but copper will still be required.”

Speaking about the challenges Europe will face in upscaling its EV infrastructure, Gear said universal compatibility and common standards would benefit all.

Trying to calculate and forecast the amount of copper needed for charging stations can be a difficult task, Jonathan Barnes, principal consultant for copper at Roskill, told INN. That’s because there are multiple factors at play, including if copper will be the metal of choice in Europe instead of aluminum.

“Overall it’s going to be positive for copper,” Barnes added.

Copper will also be needed in energy storage, which is thought to be the most copper-intensive component in the electromobility spectrum. Forecasts show that for every kilowatt hour of a lithium-ion battery, 1.1 to 1.2 kilograms of copper are used.

Copper supply chains in Europe

The geopolitical developments of the past few years have led to many questions about supply chains for critical minerals and how to make them more secure and efficient, with localization and regionalization at the center of the discussion.

Copper is not listed as a critical mineral in the EU, but as EV demand increases, it is interesting to see the steps the region is taking to further strengthen its supply chain.

According to the ICSG, Europe currently consumes around 4 million tonnes of copper. To meet that demand, it uses four sources: it mines 20 percent of its total supply of copper, with another 43 percent coming from scrap from within the EU. The rest comes from net imports of metal from other regions (12 percent), and imports of ores and concentrates (25 percent).

“Although Europe produces less refined copper than it consumes and as such is a net importer of refined copper, the region as a whole is a net exporter from a copper semis perspective — complementing the refined copper with direct use of scrap,” Joannides said. “The decision to meet its demand locally will depend very much on whether the manufacturing landscape sits within the region or whether the region relies on imports of end products.”

In terms of refined copper, according to Refinitiv data, the region consumes around 3 million tonnes in total, in general around half a million tonnes more than it produces. In terms of mine supply the gap is far greater, with output below 1 million tonnes.

“At present, we see little opportunity for significant mine production growth in this region over the next decade as some mines are depleting in countries such as Spain and Finland,” Karen Norton of Refinitiv told INN. In Europe more broadly, Russia is the largest source of growth outside the EU, with the Udokan mine set to come on stream in 2022/2023.

“But much of any additional mined material is likely to be sent to China, with the possibility of a portion perhaps being processed domestically, albeit on a relatively limited scale,” she added.

Similarly, Roskill’s Barnes said there are opportunities for increased production of copper within Europe, but the majority of those opportunities are focused on either new primary production in Russia from some upcoming mining projects, or increased secondary production elsewhere.

 

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For Norton, in terms of its own supply, Europe is probably going to struggle to compete on costs with many other regions.

“Concentrates to a large extent would have to be imported to enable significant primary metal production, and global mine supply growth is unlikely to be stellar,” she said.

Sustainability in copper’s supply chain is another factor to consider, as emission regulations will get tighter and tighter in the future.

“If you’re operating a copper smelter, you’re going to have to be spending more and more money to reduce emissions,” Barnes said, adding that a lot of the smelters are already best in class in the world. “So that’s very unlikely to be a problem in Western Europe. However, the further you go into Eastern Europe, particularly in Russia, environmental considerations are not so high on the list.”

Looking at smelter/refinery capacity into 2024, Refinitiv does not see any sizeable expansions on the horizon in the EU and Europe more generally in that timeframe.

As it stands, given Chinese measures already taken to improve environmental standards, and the country’s accelerated push to a green, low-carbon circular economy, Norton is expecting China, and the countries that form part of the One Belt One Road initiative, to remain dominant in the production of copper metal and the supply of copper products to the rest of the world.

“In all likelihood, the bulk of new capacity additions over this period will continue to be made in China, which accounts for around half of global output,” Norton said. “Beyond that there may be potential for some growth in European capacity as the circular economy and move to increased recycling is likely to gain further traction.”

Recycling is an area worth paying attention to as Europe is a key player, with nearly 50 percent of its copper demand through the recovery and recycling of value chain offcuts, plus end-of-life products, according to the European Copper Institute.

“Scrap is going to have to be more important and certainly (there is) probably going to need to be more legislation put in place,” Barnes said, explaining that the traditional route to supplying the raw material for the foil in batteries is high-grade scrap.

If the circular economy concept is thought about and put in place correctly, it could be “tremendously positive,” Barnes added. “The more we can recover, the less we need to mine,” he said. “The challenges for mining are insurmountable — as I look at it going a decade out, can we find enough new mines? If we haven’t discovered them now, it’s too late, we won’t be able to develop them, so recycling is going to have to be a large part of the answer.”

But, according to Norton, scrap supplies other than those created domestically, including e-waste, are most likely to be attracted to Asia rather than Europe.

“The region may well struggle to secure its needs for copper and other raw materials needed for the transition to carbon neutrality, and policy makers may need to act soon,” she added.

Don’t forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

 

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International

United Airlines adds new flights to faraway destinations

The airline said that it has been working hard to "find hidden gem destinations."

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Since countries started opening up after the pandemic in 2021 and 2022, airlines have been seeing demand soar not just for major global cities and popular routes but also for farther-away destinations.

Numerous reports, including a recent TripAdvisor survey of trending destinations, showed that there has been a rise in U.S. traveler interest in Asian countries such as Japan, South Korea and Vietnam as well as growing tourism traction in off-the-beaten-path European countries such as Slovenia, Estonia and Montenegro.

Related: 'No more flying for you': Travel agency sounds alarm over risk of 'carbon passports'

As a result, airlines have been looking at their networks to include more faraway destinations as well as smaller cities that are growing increasingly popular with tourists and may not be served by their competitors.

The Philippines has been popular among tourists in recent years.

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United brings back more routes, says it is committed to 'finding hidden gems'

This week, United Airlines  (UAL)  announced that it will be launching a new route from Newark Liberty International Airport (EWR) to Morocco's Marrakesh. While it is only the country's fourth-largest city, Marrakesh is a particularly popular place for tourists to seek out the sights and experiences that many associate with the country — colorful souks, gardens with ornate architecture and mosques from the Moorish period.

More Travel:

"We have consistently been ahead of the curve in finding hidden gem destinations for our customers to explore and remain committed to providing the most unique slate of travel options for their adventures abroad," United's SVP of Global Network Planning Patrick Quayle, said in a press statement.

The new route will launch on Oct. 24 and take place three times a week on a Boeing 767-300ER  (BA)  plane that is equipped with 46 Polaris business class and 22 Premium Plus seats. The plane choice was a way to reach a luxury customer customer looking to start their holiday in Marrakesh in the plane.

Along with the new Morocco route, United is also launching a flight between Houston (IAH) and Colombia's Medellín on Oct. 27 as well as a route between Tokyo and Cebu in the Philippines on July 31 — the latter is known as a "fifth freedom" flight in which the airline flies to the larger hub from the mainland U.S. and then goes on to smaller Asian city popular with tourists after some travelers get off (and others get on) in Tokyo.

United's network expansion includes new 'fifth freedom' flight

In the fall of 2023, United became the first U.S. airline to fly to the Philippines with a new Manila-San Francisco flight. It has expanded its service to Asia from different U.S. cities earlier last year. Cebu has been on its radar amid growing tourist interest in the region known for marine parks, rainforests and Spanish-style architecture.

With the summer coming up, United also announced that it plans to run its current flights to Hong Kong, Seoul, and Portugal's Porto more frequently at different points of the week and reach four weekly flights between Los Angeles and Shanghai by August 29.

"This is your normal, exciting network planning team back in action," Quayle told travel website The Points Guy of the airline's plans for the new routes.

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Walmart launches clever answer to Target’s new membership program

The retail superstore is adding a new feature to its Walmart+ plan — and customers will be happy.

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It's just been a few days since Target  (TGT)  launched its new Target Circle 360 paid membership plan. 

The plan offers free and fast shipping on many products to customers, initially for $49 a year and then $99 after the initial promotional signup period. It promises to be a success, since many Target customers are loyal to the brand and will go out of their way to shop at one instead of at its two larger peers, Walmart and Amazon.

Related: Walmart makes a major price cut that will delight customers

And stop us if this sounds familiar: Target will rely on its more than 2,000 stores to act as fulfillment hubs. 

This model is a proven winner; Walmart also uses its more than 4,600 stores as fulfillment and shipping locations to get orders to customers as soon as possible.

Sometimes, this means shipping goods from the nearest warehouse. But if a desired product is in-store and closer to a customer, it reduces miles on the road and delivery time. It's a kind of logistical magic that makes any efficiency lover's (or retail nerd's) heart go pitter patter. 

Walmart rolls out answer to Target's new membership tier

Walmart has certainly had more time than Target to develop and work out the kinks in Walmart+. It first launched the paid membership in 2020 during the height of the pandemic, when many shoppers sheltered at home but still required many staples they might ordinarily pick up at a Walmart, like cleaning supplies, personal-care products, pantry goods and, of course, toilet paper. 

It also undercut Amazon  (AMZN)  Prime, which costs customers $139 a year for free and fast shipping (plus several other benefits including access to its streaming service, Amazon Prime Video). 

Walmart+ costs $98 a year, which also gets you free and speedy delivery, plus access to a Paramount+ streaming subscription, fuel savings, and more. 

An employee at a Merida, Mexico, Walmart. (Photo by Jeffrey Greenberg/Universal Images Group via Getty Images)

Jeff Greenberg/Getty Images

If that's not enough to tempt you, however, Walmart+ just added a new benefit to its membership program, ostensibly to compete directly with something Target now has: ultrafast delivery. 

Target Circle 360 particularly attracts customers with free same-day delivery for select orders over $35 and as little as one-hour delivery on select items. Target executes this through its Shipt subsidiary.

We've seen this lightning-fast delivery speed only in snippets from Amazon, the king of delivery efficiency. Who better to take on Target, though, than Walmart, which is using a similar store-as-fulfillment-center model? 

"Walmart is stepping up to save our customers even more time with our latest delivery offering: Express On-Demand Early Morning Delivery," Walmart said in a statement, just a day after Target Circle 360 launched. "Starting at 6 a.m., earlier than ever before, customers can enjoy the convenience of On-Demand delivery."

Walmart  (WMT)  clearly sees consumers' desire for near-instant delivery, which obviously saves time and trips to the store. Rather than waiting a day for your order to show up, it might be on your doorstep when you wake up. 

Consumers also tend to spend more money when they shop online, and they remain stickier as paying annual members. So, to a growing number of retail giants, almost instant gratification like this seems like something worth striving for.

Related: Veteran fund manager picks favorite stocks for 2024

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Government

President Biden Delivers The “Darkest, Most Un-American Speech Given By A President”

President Biden Delivers The "Darkest, Most Un-American Speech Given By A President"

Having successfully raged, ranted, lied, and yelled through…

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President Biden Delivers The "Darkest, Most Un-American Speech Given By A President"

Having successfully raged, ranted, lied, and yelled through the State of The Union, President Biden can go back to his crypt now.

Whatever 'they' gave Biden, every American man, woman, and the other should be allowed to take it - though it seems the cocktail brings out 'dark Brandon'?

Tl;dw: Biden's Speech tonight ...

  • Fund Ukraine.

  • Trump is threat to democracy and America itself.

  • Abortion is good.

  • American Economy is stronger than ever.

  • Inflation wasn't Biden's fault.

  • Illegals are Americans too.

  • Republicans are responsible for the border crisis.

  • Trump is bad.

  • Biden stands with trans-children.

  • J6 was the worst insurrection since the Civil War.

(h/t @TCDMS99)

Tucker Carlson's response sums it all up perfectly:

"that was possibly the darkest, most un-American speech given by an American president. It wasn't a speech, it was a rant..."

Carlson continued: "The true measure of a nation's greatness lies within its capacity to control borders, yet Bid refuses to do it."

"In a fair election, Joe Biden cannot win"

And concluded:

“There was not a meaningful word for the entire duration about the things that actually matter to people who live here.”

Victor Davis Hanson added some excellent color, but this was probably the best line on Biden:

"he doesn't care... he lives in an alternative reality."

*  *  *

Watch SOTU Live here...

*   *   *

Mises' Connor O'Keeffe, warns: "Be on the Lookout for These Lies in Biden's State of the Union Address." 

On Thursday evening, President Joe Biden is set to give his third State of the Union address. The political press has been buzzing with speculation over what the president will say. That speculation, however, is focused more on how Biden will perform, and which issues he will prioritize. Much of the speech is expected to be familiar.

The story Biden will tell about what he has done as president and where the country finds itself as a result will be the same dishonest story he's been telling since at least the summer.

He'll cite government statistics to say the economy is growing, unemployment is low, and inflation is down.

Something that has been frustrating Biden, his team, and his allies in the media is that the American people do not feel as economically well off as the official data says they are. Despite what the White House and establishment-friendly journalists say, the problem lies with the data, not the American people's ability to perceive their own well-being.

As I wrote back in January, the reason for the discrepancy is the lack of distinction made between private economic activity and government spending in the most frequently cited economic indicators. There is an important difference between the two:

  • Government, unlike any other entity in the economy, can simply take money and resources from others to spend on things and hire people. Whether or not the spending brings people value is irrelevant

  • It's the private sector that's responsible for producing goods and services that actually meet people's needs and wants. So, the private components of the economy have the most significant effect on people's economic well-being.

Recently, government spending and hiring has accounted for a larger than normal share of both economic activity and employment. This means the government is propping up these traditional measures, making the economy appear better than it actually is. Also, many of the jobs Biden and his allies take credit for creating will quickly go away once it becomes clear that consumers don't actually want whatever the government encouraged these companies to produce.

On top of all that, the administration is dealing with the consequences of their chosen inflation rhetoric.

Since its peak in the summer of 2022, the president's team has talked about inflation "coming back down," which can easily give the impression that it's prices that will eventually come back down.

But that's not what that phrase means. It would be more honest to say that price increases are slowing down.

Americans are finally waking up to the fact that the cost of living will not return to prepandemic levels, and they're not happy about it.

The president has made some clumsy attempts at damage control, such as a Super Bowl Sunday video attacking food companies for "shrinkflation"—selling smaller portions at the same price instead of simply raising prices.

In his speech Thursday, Biden is expected to play up his desire to crack down on the "corporate greed" he's blaming for high prices.

In the name of "bringing down costs for Americans," the administration wants to implement targeted price ceilings - something anyone who has taken even a single economics class could tell you does more harm than good. Biden would never place the blame for the dramatic price increases we've experienced during his term where it actually belongs—on all the government spending that he and President Donald Trump oversaw during the pandemic, funded by the creation of $6 trillion out of thin air - because that kind of spending is precisely what he hopes to kick back up in a second term.

If reelected, the president wants to "revive" parts of his so-called Build Back Better agenda, which he tried and failed to pass in his first year. That would bring a significant expansion of domestic spending. And Biden remains committed to the idea that Americans must be forced to continue funding the war in Ukraine. That's another topic Biden is expected to highlight in the State of the Union, likely accompanied by the lie that Ukraine spending is good for the American economy. It isn't.

It's not possible to predict all the ways President Biden will exaggerate, mislead, and outright lie in his speech on Thursday. But we can be sure of two things. The "state of the Union" is not as strong as Biden will say it is. And his policy ambitions risk making it much worse.

*  *  *

The American people will be tuning in on their smartphones, laptops, and televisions on Thursday evening to see if 'sloppy joe' 81-year-old President Joe Biden can coherently put together more than two sentences (even with a teleprompter) as he gives his third State of the Union in front of a divided Congress. 

President Biden will speak on various topics to convince voters why he shouldn't be sent to a retirement home.

According to CNN sources, here are some of the topics Biden will discuss tonight:

  • Economic issues: Biden and his team have been drafting a speech heavy on economic populism, aides said, with calls for higher taxes on corporations and the wealthy – an attempt to draw a sharp contrast with Republicans and their likely presidential nominee, Donald Trump.

  • Health care expenses: Biden will also push for lowering health care costs and discuss his efforts to go after drug manufacturers to lower the cost of prescription medications — all issues his advisers believe can help buoy what have been sagging economic approval ratings.

  • Israel's war with Hamas: Also looming large over Biden's primetime address is the ongoing Israel-Hamas war, which has consumed much of the president's time and attention over the past few months. The president's top national security advisers have been working around the clock to try to finalize a ceasefire-hostages release deal by Ramadan, the Muslim holy month that begins next week.

  • An argument for reelection: Aides view Thursday's speech as a critical opportunity for the president to tout his accomplishments in office and lay out his plans for another four years in the nation's top job. Even though viewership has declined over the years, the yearly speech reliably draws tens of millions of households.

Sources provided more color on Biden's SOTU address: 

The speech is expected to be heavy on economic populism. The president will talk about raising taxes on corporations and the wealthy. He'll highlight efforts to cut costs for the American people, including pushing Congress to help make prescription drugs more affordable.

Biden will talk about the need to preserve democracy and freedom, a cornerstone of his re-election bid. That includes protecting and bolstering reproductive rights, an issue Democrats believe will energize voters in November. Biden is also expected to promote his unity agenda, a key feature of each of his addresses to Congress while in office.

Biden is also expected to give remarks on border security while the invasion of illegals has become one of the most heated topics among American voters. A majority of voters are frustrated with radical progressives in the White House facilitating the illegal migrant invasion. 

It is probable that the president will attribute the failure of the Senate border bill to the Republicans, a claim many voters view as unfounded. This is because the White House has the option to issue an executive order to restore border security, yet opts not to do so

Maybe this is why? 

While Biden addresses the nation, the Biden administration will be armed with a social media team to pump propaganda to at least 100 million Americans. 

"The White House hosted about 70 creators, digital publishers, and influencers across three separate events" on Wednesday and Thursday, a White House official told CNN. 

Not a very capable social media team... 

The administration's move to ramp up social media operations comes as users on X are mostly free from government censorship with Elon Musk at the helm. This infuriates Democrats, who can no longer censor their political enemies on X. 

Meanwhile, Democratic lawmakers tell Axios that the president's SOTU performance will be critical as he tries to dispel voter concerns about his elderly age. The address reached as many as 27 million people in 2023. 

"We are all nervous," said one House Democrat, citing concerns about the president's "ability to speak without blowing things."

The SOTU address comes as Biden's polling data is in the dumps

BetOnline has created several money-making opportunities for gamblers tonight, such as betting on what word Biden mentions the most. 

As well as...

We will update you when Tucker Carlson's live feed of SOTU is published. 

Tyler Durden Fri, 03/08/2024 - 07:44

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