Analyst bullish on copper, aluminum

SAN MATEO, Calif. — The booming demand for electric vehicles will create demand for more than just lithium or cobalt over time. The switch from gasoline to electric will require a large amount of infrastructure, which takes a lot of copper and aluminum too, according to Franklin Templeton’s fund manager Stephen Land.

“With [the push for electric vehicles], it’s hard not to feel optimistic for aluminum and copper demand,” according to Land, 41, who co-manages the roughly $1.08 billion Franklin Gold and Precious Metals Fund. Copper has always seen demand stemming from auto and electronic devices, and this push for electric vehicles will accelerate that demand.

Aluminum has a lot of supply globally, but most of it comes from China, which is itself trying to reduce output because of environmental issues. This “supply/demand scenario would create an interesting setup over the medium-term” for both metals, according to Land.

Supply disruptions at major mines have also helped to lift copper prices to the highest in nearly three years, while aluminum is the best performer this year on the Bloomberg Commodity Index after the Chinese government ordered output curbs.

Electric cars contain about three times more copper than a regular vehicle, according to Glencore. Even more is needed for charging stations.