"There's a lot of catching up to do" when it comes to copper supply, said Byron King of the Lifetime Income Report.
Byron King: Copper Supply Can't Meet Future Demand, Here's How to Positionyoutu.be
Copper is down from its all-time high earlier this year, but its long-term outlook remains strong.
Speaking to the Investing News Network at the Rule Symposium, Byron King said investors who follow the copper market know that the red metal's supply/demand outlook creates a positive picture.
"If you follow the fundamentals of copper you know that if you forecast it out … there's not enough copper," he said, noting that many large mines focused on the base metal are in "terminal decline," with not nearly enough new discoveries and development projects in the pipeline.
"It is an underinvested sector for the last let's say 15 years, in terms of how much money went into exploration, how much money went into development — and certainly how much money did not go into building mines," explained King, who writes the Lifetime Income Report for St. Paul Research, which is part of Agora.
In terms of where investors interested in copper stocks may want to focus, King said it depends on their goals.
He noted that big players like BHP (ASX:BHP,NYSE:BHP,LSE:BHP) are a safe way to get exposure to copper, while Western Copper and Gold (TSX:WRN,NYSEAMERICAN:WRN) is an example of an advanced developer with a massive deposit just waiting for a large miner to pull the trigger.
All of that said, King believes it's important to be aware of how broader trends affect resource companies.
"It doesn't matter how good of a mining company you might be, it doesn't matter that you're pulling out cores that are solid copper or solid gold — that doesn't matter if the market just decides that it wants to tumble. So be wary along those lines," he reminded market participants.
Watch the interview above for more from King on the path forward for the copper sector. You can also click here for the full Rule Symposium playlist on YouTube.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Western Copper and Gold is a client of the Investing News Network. This article is not paid-for content.
The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.