Visualizing Copper’s Role in a Low-Carbon Economy
Climate change is top of mind for much of the world’s population.
The transition to renewable energy and electrification will require tons of metals, and copper is considered the most essential.
The above infographic from Teck outlines copper’s role in low-carbon technologies, highlighting why the red metal is essential for a low-carbon future.
Copper has been an essential material to man since prehistoric times. In fact, it is the oldest metal known, dating back more than 10,000 years and one of the most used because of its versatility.
The metal has four key properties that make it ideal for energy storage, propulsion for electrical vehicles (EVs), and renewable energy:
- Conductivity: Copper has the highest electrical conductivity rating of all non-precious metals.
- Ductility: Copper can easily be shaped into pipes, wires or sheets.
- Efficiency: Copper’s thermal efficiency is about 60% greater than aluminum, so it can remove heat far more rapidly.
- Recyclability: Copper is 100% recyclable and can be used repeatedly without any loss of performance.
In addition to its unique properties, copper remains relatively affordable, making it a key part of the energy transition.
A Cornerstone of the EV Revolution
EVs can use up to four times as much copper when compared to an internal combustion engine (ICE) passenger car. The amount goes up as the size of the vehicle increases: a fully electric bus uses between 11 and 18 times more copper than an ICE passenger vehicle.
Copper is used in every major EV component, from the motor to the inverter and the electrical wiring. In fact, a fully electric vehicle can use up to a mile of copper wiring.
Currently, there are few alternatives to copper. Aluminum is the closest one, but despite it being lighter and almost three times cheaper, aluminum cables require double the size of any copper equivalent to conduct the same amount of electricity.
The Most Essential Metal for Renewable Energy
Copper is an essential element for almost all electricity-related technologies. According to the Copper Alliance, renewable energy systems can require up to 12x more copper compared to traditional energy systems.
Technology 2020 Installed Capacity (megawatts) Copper Content (2020, tonnes) 2050p Installed Capacity (megawatts) Copper Content (2050p, tonnes)
Solar PV 126,735 MW 633,675 372,000 MW 1,860,000
Onshore Wind 105,015 MW 451,565 202,000 MW 868,600
Offshore Wind 6,013 MW 57,725 45,000 MW 432,000
By 2050, annual copper demand from wind and solar technologies could exceed 3 million tonnes or around 15% of 2020 global copper production.
The Race for Copper
Goldman Sachs predicts copper demand for low-carbon technologies will grow to 5.4 million tonnes by 2030, up from around 1 million tonnes in 2021.
Meanwhile, the number of operating mines and proposed projects are not meeting projected demand and the supply scenario looks quite constrained over the medium term.
“We have deficits over the course of 2021 and next year. Inventories will be run down to very low levels, we believe, by the middle of 2022.”
—Nick Snowdon, Commodities Strategist, Goldman Sachs
As the transition to renewable energy and electrification speeds up, so will the pressure for new copper projects in the pipeline.
Teck is one of Canada’s leading mining companies committed to responsibly producing copper needed for a low-carbon future.
Retirement Spending: How Much Do Americans Plan to Spend Annually?
Retirement expenses can vary significantly from person to person. In this graphic, we show the range of expected retirement spending.
Americans’ Expected Annual Retirement Spending
Planning for retirement can be a daunting task. How much money will you need? What will your retirement spending look like?
It varies from person to person, based on factors like your health, outstanding expenses, and desired lifestyle. One helpful trick is to break it down into how much you estimate you’ll spend each year.
In this graphic from Personal Capital, we show the expected annual retirement spending of Americans. It’s the last in a three-part series that explores Americans’ spending and savings.
The Range of Retirement Spending
To determine how much people expect to spend, we used anonymized data from users of Personal Capital’s retirement planning tool. It’s worth noting that these users are proactive regarding financial planning. They also have a median net worth of $829,000 compared to the $122,000 median net worth of the U.S. population overall.
Here is the range of expected annual retirement spending.
|Expected Annual Retirement Spending||Percent of People|
Users are a mix of single individuals and people in a relationship. In all cases, expected retirement spending is what the household expects to spend annually.
The most commonly-cited expected spending amount is $60,000. Interestingly, this is roughly in line with what Americans spend annually on their credit cards. This suggests that people may be using their current bills to help gauge their future retirement spending.
Median spending, or the middle value when spending is ordered from lowest to highest, falls at $70,000. However, average spending is a fair amount higher at $100,000. This is because the average is calculated by adding up all the expected retirement spending amounts and dividing by the total number of users. Higher expected spending amounts, some in excess of $300,000 per year, skew the average calculation upwards.
Of course, given their higher net worth, it’s perhaps not surprising that many Personal Capital users expect to spend larger amounts in retirement. How does this compare to the general population? According to the Bureau of Labor Statistics, Americans age 65 and older spend about $48,000 per year on average.
Chances of Retirement Success
Once you’ve determined how much you’ll spend in retirement, your next step may be to wonder if your savings are on track. Based on an assessment of Personal Capital retirement planner users, here is the breakdown of people’s chance of success.
The good news: more than half of people have an 80% or better chance of meeting their retirement spending goals. This means they have sufficient financial assets and are contributing enough, regularly enough, to meet their expected spending amount. The not so good news: one in five people has a less than 50% chance of meeting their goals.
This problem is even more troublesome in the overall U.S. population. Only 50% of people have a retirement account, and the Center for Retirement Research at Boston College estimates half of today’s workers are unprepared for retirement.
Setting Your Own Retirement Spending Goals
While seeing the goals of others is a starting point, your annual retirement spending will be very specific to you. Not sure where to start?
Financial planners typically recommend that you should plan on needing 70-80% of your pre-retirement income in retirement. This is because people generally no longer have certain expenses, such as commuting or childcare costs, when they retire. However, keep in mind your expenses could be higher if you still have a mortgage, encounter unforeseen medical expenses, or want to splurge on things like travel when you retire.
It requires some upfront planning, but being realistic about your retirement spending can give you confidence in your financial future.
Navigating Market Volatility: Why ETFs Are Critical Tools
Historically, the trading volume of ETFs has spiked during market volatility. We explore why ETFs are preferred by institutional investors.
Download the ETF Snapshot for free.
Why ETFs Are Critical Tools During Market Volatility
Investors experienced record-breaking volatility in 2020. During COVID-19 market turbulence, the CBOE Volatility index surpassed the previous peak seen in 2008.
In this infographic from iShares, we explore how ETFs rose in popularity during this time—and the characteristics that make them particularly useful during market volatility. It’s the first in a five-part series covering key insights from the ETF Snapshot, a comprehensive report on how institutional investors manage volatility.
To assess how institutional investors navigated this volatility, Institutional Investor published a report in 2021 based on a survey of 766 decision makers. Respondents were from various types of organizations, firm sizes, and regions.
For instance, here is how responses broke down by location:
- 21% Asia Pacific
- 36% North America
- 29% Europe, Middle East and Africa
- 14% Latin America
Here’s what the survey found.
Rebalancing During Market Volatility
In total, 90% of institutional investors said they rebalanced their portfolios between the first and third quarter of 2020. How did they do it?
Among all financial tools, ETFs were the most popular vehicle for rebalancing. For instance, ETFs were used by 70% of investors globally, compared to the 51% who used mutual funds or derivatives.
The popularity of ETFs was evident in market activity. From January to March 2020, ETFs as a proportion of total equity trading volume increased.
|January 2020||February 2020||March 2020|
|ETF trading volume||$95B||$136B||$240B|
|ETF as % of equity volume||26%||27%||36%|
Based on an average of daily values. Reflects all listed U.S. ETFs across all asset classes.
This trend is true historically as well, as ETF trading volume has typically spiked during periods of volatility.
Want more institutional insights into ETFs?
Download The ETF Snapshot for free.
The Attributes Driving ETF Usage
Why are ETFs preferred by institutional investors? They offer three key characteristics:
- Liquidity: ETFs make it much simpler to buy and sell large portfolios instantly, instead of trading individual securities.
- Transparency: Among multi-asset managers, transparency of holdings is the top reason for using ETFs. A clear holdings breakdown helps these managers achieve exposures to particular asset classes, sectors, and styles.
- Efficiency: ETFs can be traded quickly. They typically also have lower transaction costs relative to the underlying basket of securities.
Based on these key benefits, ETFs were an invaluable tool during extreme market volatility.
ETFs are also poised to help institutional investors navigate the market going forward. Globally, 65% of institutional investors plan to increase their use of ETFs in the future.
In fact, this is already coming to fruition. As of September 2021, the average daily trading volume of ETFs was up more than 5% compared to 2020.
Evidently, ETFs play a critical part in helping institutional investors achieve their goals.
Download the ETF snapshot for free.
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