09. June 2021 | 10:55 CET
NIO, JinkoSolar, Siemens Energy, Nevada Copper - This is the copper sensation!
The copper shortage continues as demand is continuously increasing. The current slightly weakening copper price should not hide the general state of the market. Resources are scarce, procurement markets are depleted, and demand remains at a high level. Current trends in the economy are further exacerbating this situation. Modern electric vehicles use about three to four times as much copper as a conventional internal combustion vehicle. It should not be forgotten that the construction of the charging infrastructure also requires significant amounts of copper. New mines are not currently in sight, but there is news from Nevada.
time to read:
ISIN: US62914V1061 , US47759T1007 , DE000ENER6Y0 , CA64128F1099
"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Nevada Copper - Mine expansion in Nevada fully on track
Nevada Copper has now put its feet on the ground in early 2021 to accelerate its mine expansion. Demand could not be better, and this also makes for good negotiations with potential financing partners. The real reason for the current market skew goes back to the extensive mine closures between 2010-2015 when the copper price abruptly crashed from USD 10,000 to below USD 5,000 at the time. The USD 10,000 level has now been regained.
Nevada Copper is currently operating an underground mine. Production has only just started and will continue to be developed forward. In one projection, the Pumpkin Hollow mine is scheduled to produce 77 million pounds of copper concentrate annually. During the first quarter, the Company completed significant electrical upgrades to provide sufficient power for additional production equipment and ventilation to support the ramp-up of the underground mine. Approximately 3,173 tonnes of concentrate were produced at an average copper grade of 24%, with the grade reaching 26% by March. Similarly, recovery grades improved from 82% in Q4 2020 to over 90% in 2021. High hopes are held for the development of the open pit mine in the immediate vicinity, which is estimated to cost up to 200 million pounds.
There has been no new production facility in North America in the last 10 years, and international attention to Nevada Copper's Pumpkin Hollow project is high because of this. Only very few explorers manage to prove copper in the ground through exploration and economically mineable quantities. The subsequent task of developing an operating property is not only complex but can be extremely challenging. Nevada has an excellent team for these processes and can start delivering real results in the fall.
NCU stock is very liquid, with over 1 million shares changing hands daily in Canada and tight bidding on Tradegate in Germany. For growing production, the current mine valuation of about CAD 450 million is quite reasonable.
NIO - Surprising drop in production figures in May
Electric car startup NIO announced just a few days ago that they are extending their cooperation with production partner Jianghuai Automobile (JAC) for at least 3 years. It also agreed to double its production capacity to 240,000 units per year. Just over a year ago, the Tesla competitor had severe financial problems, which new, financially strong investors could eliminate.
In addition to the new contract with JAC, another production plant is also being planned. Whether this will be operated by NIO itself or also by JAC is still unclear. The medium-term goal is a production capacity of around 1 million vehicles. In parallel, a charging network for e-cars is being ramped up, and this is also being considered. So far, NIO has sold its cars exclusively in China, but expansion into the European market is planned for this year. Cars from NIO are also to be sold in Germany from 2022.
In its presented figures, the Chinese producer announced that in May 2021, they had delivered a total of 6,711 vehicles, which represents a growth of 95% compared to the previous year. However, compared to April this year, when 7,102 cars were delivered, it corresponds to a decrease in delivery figures of about 6%. The Company cited the global semiconductor shortage as the main reason for the decline in May. It is also due to the supply of critical raw materials such as copper.
NIO shares rose after the May figures, but the price is now close to the next resistance at around USD 50. Here, the value will struggle for the time being. Wait and see!
JinkoSolar - High demand for new products
Another representative from the renewable energy generation industry is JinkoSolar. The increasing demands of the distributed power generation market require unique solutions from all commercial and residential customers. Meeting these is a challenge when many PV modules are not compatible with inverters, components, and mounting systems on the market.
Demand in the global distributed generation (DG) market is expected to grow rapidly at a compound annual growth rate (CAGR) of 10% between 2021 and 2025. The Tiger Pro 54 HC solar module is a high-end solution for residential and commercial rooftop PV system owners. The new module represents a significant advancement in 10BB and TR technology, offering customers a highly competitive product with a reasonable price/performance ratio. Because of its characteristics, the new solar module can generate more than 2% cost reduction per year, increasing the efficiency of the whole PV system.
JinkoSolar's stock successfully turned around in May, gaining a good 20%. Currently, the value stands at USD 37.5. The current rally could well continue to about USD 50.
Siemens Energy - Cooperation with Mitsubishi on greenhouse gases
Siemens Energy and Mitsubishi Electric want to jointly explore possibilities to reduce the use of climate-damaging greenhouse gases in high-voltage switchgear. The companies reached an agreement in principle yesterday. The aim is to use clean solutions instead of greenhouse gases as an insulating medium. Worldwide, sulfur hexafluoride still predominates as an insulating gas in most substations. It is the strongest known greenhouse gas in the world. Even with minimal leakage of the gas, the impact on global warming is significant.
Siemens Energy shares are in a downtrend but could exit if there is no breakthrough at the EUR 25 mark. The stock was issued in the fall of 2020 at EUR 21. The share price still needs some time to digest the expiring lock-up periods.