Commodities: Copper
Freeport-McMoRan delivered a better-than-expected second quarter, with stronger realised commodity prices and solid copper volumes offsetting lower production from Grasberg.
As we touched on earlier copper has been reined in recently by increasing geopolitical uncertainty around Iran and a sharp correction in the “AI Trade”, with the relatively new correlation illustrated on the chart below. However, the last few weeks have seen copper shrug off both of these headwinds, suggesting when one, or both, are removed we should see the industrial metal hit our target of new all-time highs.
AIC Mines (A1M) has come under pressure following a softer June quarter, however, when we stand back and look at the longer-term trends, we remain comfortable with the position in the Emerging Companies Portfolio. Quarterly costs were elevated by higher diesel prices, wet weather and operational disruption, while the earlier introduction of lower-grade Jericho ore diluted the quarterly result.
Copper managed to advance last week but gains were reined in by fears the conflict would weigh on economic growth – this feels like another market poised to advance if/when the US and Iran can find a lasting resolution.
Hi guys, would love to know your current view on a few positions in the growth portfolio – how you feel about how the buying thesis is playing out, your current levels of ‘comfort’ in these positions, I note they are all marked active, so would MM be buyers at these levels if you weren’t in them already. Has anything changed? More conviction about some of theses? The positions are: WOR, WHC, SFR and MGR. Thanks so much for your analysis.
Hi MM,
Hi Market matters Team
Can I have your current view on EOS -Electro Optic
It has fallen to a low this morning of $7.31. Below the $8 capital raise. Is this a buy? Do you prefer Droneshield in this space or DFND ETF?
A1M – is this a buy or hold?
regards
Debbie
A1M -17.79% was hit after June-quarter costs came in materially higher, overshadowing another year in which Eloise met production and cost guidance.
The QRE ETF has corrected by 15% over the past few weeks from its June high, and we would say it’s now in an optimal accumulation phase for investors who don’t want to run the gauntlet of earnings misses, operational issues, etc. However, with the ETF holding ~15% in energy and utilities stocks, we still think picking individual stocks is a better way to go for the moves that we’re targeting.
