Commodities: Copper
March kicked off with another week dominated by news around Russia’s invasion of the Ukraine while over the weekend we saw the Chinese Government set ambitious economic growth targets suggesting another bout of aggressive fiscal stimulus in an effort to offset both rising geopolitical tensions and their painful domestic property collapse – it was only back in the 2nd half of 2021 that China Evergrande’s debt woes…
OZL has at times felt like our underperforming copper exposure, equivalent to Santos (STO) in the oil / gas sector i.e. OZL has corrected over 19% from its 2022 high when copper simply rotated in its fairly tight 12-months range. However the industrial metal has come back to life this week rallying ~7% suddenly finding itself within striking distance of our medium-term $US500/lb target i.e. now only another 5% away.
SFR -4.29%: the copper & gold miner was out with a soft 1H22 result today. NPAT of $US55m was well below consensus at $US69m and an interim dividend of 3UScps was two-thirds of what analysts had expected. The numbers were largely overshadowed by the companies first update on the recently completed acquisition of MATSA mine in Spain with Sandfire taking control…
Global stock markets have clearly moved on from “Buy growth at any price” which in our opinion has led to a market which is now one of the most exciting in recent years for active investors i.e. as we’ve already witnessed over the last 3-months some obvious positions are often going to become undone. This brings us to OZL which MM holds in our Flagship Growth…
Copper struggled last week as the $US popped on the upside but it remains in the middle of its almost 12-months consolidation pattern, at this stage we have no reason to suspect the industrial metals can’t eventually test $US500/oz but again we will probably need the $US to halt its advance.
