Wealth Outlook 2024 - Slow then grow

62 Wealth Outlook 2024 | Opportunistic Our top 10 high conviction potential opportunities FIGURE 8 Historical and Citi Research-forecast copper miner equity and spot copper prices through 2025 Copper miners (Index) Copper price (USD/MT) Citi Research estimate 12,000 6,000 0 200 100 0 2025 2020 2015 2010 Source: Bloomberg as of November 15, 2023 using Solactive Global Copper Miners Index, Citi Research as of November 15, 2023. All forecasts are expressions of opinion and are subject to change without notice and are not intended to be a guarantee of future events. Indices are unmanaged. An investor cannot invest directly in an index. They are shown for illustrative purposes only and do not represent the performance of any specific investment. Index returns do not include any expenses, fees or sales charges, which would lower performance. Past performance is no guarantee of future results. Real results may vary. — As much as 176 pounds of copper go into every electric vehicle (EV), four times the amount used in the typical internal combustion engine car. Even with improved efficiencies, EVs are expected to use 3.8 million metric tons of copper by 2030, nearly triple today’s amounts. ⁶ ⁶ Citi Research: Commodities Strategy Copper Book 2023 update – the Energy Transition bull trade, July 24, 2023. where we see high future demand, restrained supply and no substitution is copper. Beyond the impact of near-term economic weakness, Citi Research forecasts copper prices being pushed higher by the relatively low level of investment, but lengthy time required, by the companies sitting atop the world’s major copper reserves to bring on new supply ( FIGURE 8 ). Battery technology can change and bring surprising volatility to commodities such as lithium. But until new “super-conductor” materials are discovered, the electrification of infrastructure and almost every part of an electric vehicle will require large quantities of copper. No single commodity should comprise a very large portfolio stake, but profitable copper producers may be one of the lower-risk components of the energy transition, with a strong correlation to global growth once it improves.