By Justin Spittler, editor, Casey Daily Dispatch
Apple just threw out the playbook.
The tech giant is going straight to the source to secure one of the world’s most strategic metals.
It’s not copper. It’s not gold. It’s not silver…
Most people don’t even know what cobalt is. But that will soon change.
That’s because cobalt has become one of the world’s most sought-after resources. Apple and many other major companies need it to make money.
Because of this, Apple’s talking directly with cobalt miners for the first time ever. Bloomberg broke the story yesterday:
The iPhone maker is seeking contracts to buy several thousand metric tons of cobalt for five years or longer.
This is clearly a big deal for Apple. But this story also has massive implications for everyday investors.
I’ll explain why in a second. And I’ll show you how to turn this news into huge profits. But first—why is Apple taking such drastic measures?
• Cobalt is a key ingredient in lithium-ion batteries…
These are the batteries that power iPhones and every other smartphone on the planet.
Because of this, smartphones account for about a quarter of all global cobalt demand. But Apple and other companies like it have been buying massive amounts of cobalt for years.
So why is Apple doing this now?
Simple. It’s worried about a cobalt supply crunch.
• You see, cobalt demand has shot through the roof…
Cobalt consumption has spiked 13% since 2013… and it is expected to increase another 30% by 2020.
We’ve seen this massive surge in demand for a simple reason: electric vehicles (EVs).
EVs, as you probably know, aren’t like traditional vehicles. They run on electricity instead of gasoline.
Not long ago, the market for these vehicles hardly existed. There were just a few hundred EVs in the entire world.
Today, it’s a much different story. As I’ve shown you many times over the past few months, the market for EVs is exploding. It’s one of the world’s biggest megatrends.
And now, the EV revolution has forced Apple’s hand.
• EVs use lithium-ion batteries, too…
But here’s the thing: EVs require far more cobalt than smartphones.
In fact, the typical 60-kilowatt EV car battery contains around eight kilograms (18 pounds) of cobalt.
Using that number, International Speculator editor Louis James estimates that the EV market could use around 78,400 tonnes of cobalt by 2025. That’s 19 times more cobalt than what was consumed in all of 2016.
• In other words, the EV revolution is about to trigger a huge explosion in cobalt demand…
However, supplying all this cobalt won’t be easy.
There are a couple reasons for this. Number one, about 60% of the world’s cobalt comes from the Democratic Republic of Congo (DRC). According to the International Speculator team, that’s a major problem:
The DRC has been relatively stable for the past 10 to 15 years, but it has a long and recent history of extremely bloody conflict and wars. The DRC is also ground zero for the uproar over “conflict minerals.” This makes cobalt supply extremely susceptible to disruptions in supply.
Not only that, cobalt is a byproduct. About 98% of it comes from copper and nickel production. That makes getting a steady supply of cobalt difficult. Louis and his team wrote in a recent issue of International Speculator:
This makes for a fairly complex supply chain. And it’s one that’s prone to bottlenecks. In other words, most producers will not mine more to meet rising demand if the price of nickel and/or copper doesn’t justify it. As demand for cobalt is growing faster than for nickel and copper, this increases pressure on cobalt supply.
According to Louis, this one-two punch of soaring demand and tight supply will lead to a massive supply crunch.
Just look at the chart Louis and his team put together.
You can see that the cobalt supply is about to get extremely tight. In fact, Louis and his team project that we could see a massive shortfall by 2025.
• That’s why Apple is in direct talk with miners…
It can’t afford to not have a dependable cobalt supply.
And it’s not the only giant multinational company taking drastic measures, either.
BMW is also in the process of locking in a long-term cobalt supply. According to Bloomberg, it’s doing this because it expects its demand for cobalt to “surge 10-fold by the middle of the next decade.”
Volkswagen AG and Samsung SDI are also looking to pen long-term cobalt supply contracts.
This tells you everything you need to know about where the price of cobalt is headed.
Unfortunately, it’s not easy to speculate on cobalt. There’s no cobalt exchange-traded fund (ETF). And there are few cobalt pure plays out there.
The good news is that we can help. You see, Louis recently recommended a world-class miner that’s highly leveraged to the price of cobalt. Not only that, this company’s cobalt project is located in the United States. That makes it one of the safer ways to speculate on this megatrend.
You can learn more about this company by signing up for International Speculator. Click here for details.
February 22, 2018
Chart of the Day: The U.S. Dollar’s Demise
By Joe Withrow, analyst, Casey Research
The U.S. dollar is in a major long-term downtrend…
That’s the story of today’s chart, which tracks the U.S. Dollar Index from 1982 to today.
As you can see, the U.S. dollar has lost 46% of its value since 1985. And as Casey Report editor E.B. Tucker told his subscribers recently, that’s the big story that the mainstream media refuses to report on. Here’s E.B.:
Notice how the dollar moves in broad multi-year cycles. Over time it moves lower. Each rally in strength is weaker than the last, followed by a plunge. We’re already in the early stages of the next plunge.
You won’t hear much about this in the mainstream press. That’s not a conspiracy; it’s just not what the financial media does. Once the dollar collapses, they’ll write a story about it. That will be too late to help investors.
So how do you protect yourself from the dollar’s demise?
As E.B. put it, foreign stocks, gold and silver mining firms, and anything related to hard assets should shine.
Today, a reader tells us how he’s preparing for a market crash:
I have a few stocks that I've learned about from Casey and Stansberry. I know virtually nothing about investing/speculating, but have put in $17,000 and within a year, have shown $10,000 in profit. I have trailing stop losses on all companies that allow them, and I'm going to sell the companies not allowing them after the next correction comes and the prices rise again. (Most have hit the trailing stop loss, though.)
Also, I'm continuing to learn. Trying to "keep it simple, stupid,” but at less than 50% profit a year, I must add other means of gaining, because I'm convinced the crash is going to be catastrophic to at least the US economy. Thanks a million for all you're providing. And don't take any wooden nickels! Wait… take them! They're more valuable than the paper!
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