Commodities: Copper
A rising tide lifts all boats. Within a diversified portfolio I do like to include a few ‘educated’ punts. How do you think these small punts (pun intended) will fare in the rising tide that is base and precious metals? Because they are certainly still playing catch up.
The ASX-listed Global X Miners ETF (WIRE) remains one of our preferred vehicles for broad exposure to global copper producers. MM continues to view copper as a metal of the future.
The growing demand story for copper (Cu) is nothing new, it’s going to be a huge tailwind for the industrial metal over the coming years and the obvious reason why it has posted new all-time highs this week.
Copper made fresh 4-months highs overnight as orders from LME warehouses surged by the most since 2013, led by orders from Asia, and especially from Taiwan and South Korea.
There are two major structural themes playing our globally; the energy transition and explosion in Artificial Intelligence (AI). Copper is central to both. Global demand is expected to rise from ~28.5 Mt in 2024 to 50 Mt by 2050, a 70% increase from current levels. At the same time, global ore grades are declining and the average lead time for new copper miners has continued to blow out.
We answered a question in Saturdays Q&A Report that hopefully helped clarify a few points for subscribers around how Iron Ore is priced/traded. We often talk about the iron price in $US/MT as it’s traded in Singapore, but the alternative way to monitor movements is through the Chinese price (IOEA) in CNY/MT; although, by definition, we have FX implications between the two contracts.
Last week copper surged against the backdrop of supply shortfalls and bullish price predictions. Traders have been ramping up shipments to the US in recent weeks to once again capitalize on a big premium for metal on the US Comex Exchange, fuelled by ongoing uncertainty about the potential for future tariffs.
Two charts this week as strength in metals on Friday night translated to the underlying stocks. This morning we’ve focused on two respective US ETFs, because they captured the moves on Friday night. We’ve gone out on a limb by forecasting our “ideal” target areas. If we are on point here MM will be looking to take profit in one or more of our related positions into strength into 2026.
