 Good day, fellow investors. I really think that in the next decade, there will be a lot of not disruption, but simply displacement in many industries. As we are turning from oil fuel to electrical fueling to no CEO to emissions to no smoke to health, I really think that one of the ways to get exposure to that possibly future boom alongside all the other emerging markets that are going to be built grow. One way of gaining that exposure is through copper. In this video, I want to discuss how copper evolves, how the copper price moves in relation to what's going on, what are the risk and rewards there, and what would be a proper strategy to go into copper, how to invest in copper, and how to analyze copper miners for such a long term, let's say portfolio exposure to copper. Because copper, as we know, electrical vehicle uses much more copper than a normal vehicle, which means there will be more demand, emerging markets are growing, more infrastructure, more electricity everywhere, which means more copper. However, not everything is that easy, and that's something we have to keep in mind before investing in copper. The topics of today are explaining the supply demand balances and copper price moves, historical sentiment around copper, it's extremely important to know about the sentiment when investing in copper, long term stable price in relation to cost, so what's my conservative long term price forecast for copper around which I invest, and then long term bullish thesis for the base metals and copper, of course, just to keep in mind as a positive risk in the future. So let's start by looking at demand supply costs, prices, and how those things evolve. It's very volatile, that's why a lot of people say Sven, you're crazy to invest in miners, but if I take all the factors that affect that volatility, then I think I'm relatively safe when I invest in miners, safe meaning the risk is relatively low when you do it smartly, and the upside is very large when you again do it smartly. So low risk with miners is what leads to high rewards. People usually invest in hot miners that usually means high risk for little reward, so if you think the opposite of what the market thinks, then you might be well rewarded over time. Let's start. First in 2016 copper was all doom but world mine production was increasing, but then declined in 2017. However, the demand was stable, growing, is still growing, and the refined balance was negative. So there was a supply gap in copper, but there were a lot of inventories from 2010, 11, 12 after the crisis, as in 2007 everybody expected copper prices to explode. Since then, you have seen the copper warehouses levels, this is from the London Metal Exchange, stabilize a little bit going up and down, but much less than what was the case in 2003 and as you can see in 2013-14. Copper price extremely volatile, very low in the early 2000s, and then exploded as there were exuberant expectations about emerging market growth, emerging market potential, especially in 2007. Also the Chinese stock market dropped 80% in 2009 because it was completely crazy in 2007, but then supply demand again we were there in 2011, similarly as emerging markets Brazil, Argentina, if you remember, and then it was very very negative 5 years until now, and now we have let's say a fluctuation. Just to explain the volatility in the past for copper, this is what the forecast was in 2007. The copper market was forecast to double on emerging market demand. Of course, that didn't happen, but it still grew, so you can see the volatility in the price. If you can take the conservative trend of growth and when the price is below that, then is when you buy. Leave the exuberant forecasts to exuberant analysts. Supply has increased, but not that much because it is a little bit constrained. There is not that much copper as there is iron ore, aluminum, coal or whatever. You see copper, nickel and zinc have copper, nickel and zinc are a little bit constrained as they are becoming scarcer, lower grade and deeper to mine. And also you can see how copper mining costs didn't decline that much in line of what was the case earlier. However, lower copper prices, lower investments, so capex investment in base metals has really been slashed in comparison to what was in the past, and this leads to a new cycle where, okay, now we have low investments, which means there will be another supply gap in the future. So buy those metals when those are not attractive, don't buy them when those are hot. Average copper grades are falling, which means it becomes costlier and costlier to mine, and new projects are not really being found, so the copper depleted is not replaced by new copper. As the world gets electrified, copper might be an absolute winner. Demand from electric vehicles is expected to cover 18% of current supply by 2030. Electric vehicles, solar systems, storage, energy storage, so if we really switch to an electric world, then it might be even more than 18%, might be 50%, 50%, let's say, that's very important on such a sensitive supply demand balance like it is the case for copper. Further, at this prices of 2.5, what we are with 2.7, 2.8, it's not really profitable to launch new projects. This is the Lone Star Oxide Development Projects from Freeport, and at copper prices of 2.40, the after-tax net present value is zero. So only at 3.5, the after-tax net present value is 1.2 billion. So Freeport is going to wait before they invest 850 million in the project to get out 1. something billion, depending on the copper price. For them to start this project, copper prices have to be stable at 3.5 over a very long-term period, and people have to estimate that, okay, that's the new balance price. Now we are below that, so nobody's going to give Freeport the go. Yes, let's spend a billion there. So for copper to be there in higher supply, copper prices need to go up. And without those new projects, the supply gap will exceed almost current production by 2035, which means copper prices might go to 4, 5, 6, 7, 8. Who knows? And that's a positive risk. Okay, if I buy great businesses at low costs, low production costs, I get a good business now, no matter what happens to the copper price, and I am exposed to that upside. Because if there comes a recession, it will be, again, terrible for copper miners, copper, and anything. So that's something you have to know, accept before you invest in, and then this makes investing easy. This is the copper cost curve, and you can see the copper price is set, but by the last unit traded. So we are now at 2.7. So a few of copper producers are not profitable at this level. 50% copper producers are cash flow positive at 1.5, but only insustainable costs are around 2 for 50%. So at 3, we are at what 80-80 something percent are only profitable, which shows how tight is the copper market. In case of a recession, copper prices will go, let's say, to 2, even below 2, but then the expensive mines get shut down, and then again, the balance is restored, as we have seen that happened in 2016. I hope there is a recession in the next year or two years to buy all those miners at the bargain price and then wait for the bubble in electric vehicles to happen in 2025. I don't care. I have seven years to wait for 500% or 1,000% returns. So that's my story on copper. I think each portfolio has to be exposed to the commodity copper, zinc, nickel, electric vehicle trend. That's how I will invest in the electric vehicle trend, because yes, there are companies like Tesla, NIO and whatever, but or I'm not smart enough to analyze those and see the value there, or those are simply extremely overvalued. Thank you for watching. Looking forward to your comments on copper. Tomorrow, I'll discuss a copper miner landing mining to show you how that fits this copper perspective. I'll see you in the next video.