Skip to content

Copper and nickel to be key beneficiaries of Biden’s landmark infrastructure bill


President Biden’s signature $579 billion infrastructure initiative is now one step closer to being rolled out. Its staggering size and ambition will have a profound impact on commodity markets and supply chains, in particular metals like copper, nickel, and silver, which stand to benefit substantially from this investment.

The key elements of the physical infrastructure plan include modernizing 20,000 miles of highways, roads, and main streets, fixing the 10 most economically significant bridges and repairing the worst 10,000 small bridges. It will replace or repair 24,000 buses, 5,000 rail cars, 200 stations and thousands of miles of track, signals, and power systems.

500,000 US EV chargers needed by 2040

The infrastructure initiative will also see the rolling-out electric vehicles and corresponding charging network, including the construction of 500,000 EV chargers by 2040, replacing 50,000 diesel transit vehicles and electrifying at least 20% of the iconic American yellow school bus fleet.

There are also plans to replace all lead pipes and service lines, invest in the electric grid network, and roll out affordable and reliable high-speed broadband across the country.

“Copper is one of the clear beneficiaries of Biden’s US infrastructure bill, with the annual increase in demand for infrastructure driven refined copper over the next five years enjoying growth of 2.0% per year,” explained Hamad Ebrahim, Head of Research at NTree International. “Assuming an annual US refined copper consumption of approximately 1.8 million tonnes per year then the increased infrastructure spending will translate into additional refined copper demand of approximately 500k2 tonnes over the next five years.”

Ebrahim said that nickel and copper also stand to be key beneficiaries from electrification spending and the replacement of internal combustion-powered federal fleets with electric battery-powered fleets.

EVs contain more than 10x more copper than internal combustion engines

EVs contain up to 10x more copper than internal combustion engine vehicles and each electric bus contains approximately 370kgs of copper. The US yellow school bus fleet size is approximately 480,0004 and if 20% of the fleet is replaced by electric buses, an additional 35k tonnes of copper will be needed. The US also has a federal agency vehicle fleet of approximately 650k and transitioning all of those to electric vehicles will significantly increase demand for both copper and nickel.

Nickel is one of the key components of electric batteries and whilst there are a lot of uncertainties on types of battery technologies and their nickel loadings, we can make some simplified assumptions to estimate the expected additional demand for nickel. Assuming the US federal government contracts to buy American EV buses then nickel demand from replacing the whole federal fleet should be in the order of 55kt, according to NTree International.

Silver market could also see upward pressure

This estimate is partly based off analysis from the FY2020 GA Federal Fleet Report, and assumes a 35:65 ratio between passenger vehicles and trucks.

Silver is also likely to be a strong beneficiary of the bill given high-speed internet, 5G and IoT connectivity will all increase demand for silver. The US infrastructure bill is expected to increase productivity and while estimates may vary, a 2014 University of Maryland study found that every $1 of infrastructure investment adds as much as $3 to GDP growth.

Like this article? Sign up to our free newsletter.

This article does not constitute investment advice. Do your own research or consult a professional advisor.

'How to' Guides

Our latest in-depth company reports

Detailed reviews of selected companies and investment trusts.

On the podcast

Sign up for great investing stock tips

Thanks to our Partners

Our partners are established, regulated businesses and we are grateful for their support.

FP Markets
CME Group
Back To Top