Copper

[rederob]

Updating the price action for copper futures using the earlier base chart:


Just need to wait for the physical market to open to see if the tail is wagging the dog. I do know Kitco's LME warehouse inventory will decline, but that's due to withdrawals as live warrants are still around 75K tonnes.

 

[rederob]

Sanity prevailed in the physical market overnight and dragged copper back to it's more sustainable trend:


We know China has held off buying copper to the extent it reserves can hold out, but fabricators need a buffer, and without a supply response the next spike upward will be equally as sharp as yesterday's.

 

[rederob]

The trend channel below can be referenced at post #57.
In the shorter time frame here it looks innocuous, but it's crazy steep and unsustainable unless you think copper at $7/lb is possible by June 2022 (I don't).


More crazy is that the futures prices are holding above this trend, while spot copper is some 5 cents/lb lower. Apart from small declines of available copper at Comex warehouses, Shanghai and LME warehouses have had solid gains over recent days (8k tonnes at SHFE and 10K tonnes at LME). The battle seems to be about whether or not copper users are buying into elevated prices. The futures price suggest they are not, and there is pent up buying demand as inventories run down. If they are right, there will be another strong spike north. If they are not, prices will come off the boil but remain high until there is a sustained supply response.

 

[rederob]

Recalibrating the trend in place since March 2020 to pick up the May 10th record high of $4.888/lb:

After a retrace copper has quickly bounced back.
A fortnight ago Chinese warehouses added inventory while LME's shrank a touch. Last week that trend reversed. Given that Chinese producers have been holding back buying at high prices, and their warehouse inventories are declining, further price rises or at least strong prices, look like being the norm for the foreseeable future.

 

[Dona Ferentes]

a nod to Mick (@mullokintyre )

In Peru, socialist candidate Pedro Castillo is maintaining a narrow lead over right-wing rival Keiko Fujimori as votes are still being counted and increasingly contested from Sunday's run-off election [for President].

As of early Tuesday it's still being deemed "too close to call", ..... Son of peasant famers and an outspoken union leader, Castillo has "vowed to nationalize Peru's vast mineral resources, to expel foreigners who commit crimes in the country, and to move towards reinstating the death penalty," according to one profile.

 

[Smurf1976]

As has occurred during previous copper price rises, theft is now becoming a problem:

Copper thief leaves 2,000 residents without power on 'Antarctic blast' day

On one of the coldest days of the year, thousands of Kingston residents have been left shivering following mass power outages. But a huge storm wasn't to blame.

www.abc.net.au

Breaking into a live electrical substation and stealing parts of it for their scrap metal value is a really, really bad idea in lots of ways but the price rise seems to be triggering incidents like this.

Kingston is a small town ~300km from Adelaide.

 

[mullokintyre]

Problem is, my go to copper stock seems fully priced. OZL which I have traded numerous times in the past (most recently September last year), is now sitting on a PE of 38. Needs to be some serious price increases or reductions in cost to justify that high a value.
Might have to just sit this one out.

 

[Sean K]

Around ATH. No wonder Cu producers have done so well. OZL has been a dream. With the new President of Chile anti-mining, that's actually good for the POC. While supply is going to come off as old mines approach LOT, there's not a lot of new significant projects coming on. While lithium is running, I think the next thing might be copper. And, it's already been going nuts for 2 years.

 

[divs4ever]

Problem is, my go to copper stock seems fully priced. OZL which I have traded numerous times in the past (most recently September last year), is now sitting on a PE of 38. Needs to be some serious price increases or reductions in cost to justify that high a value.
Might have to just sit this one out.

i only reduced OZL , it was a patience-testing ride to get into a nice position in OZL , so decided to keep a useful parcel at a theoretic average price of $5.17 a share so the div. yield for ME isn't that bad ( but not brilliant , either )

DIVIDEND TYPE	DIVIDEND AMOUNT ($)	FRANKED	EX-DIV DATE	PAY DATE
Interim	0.160	100.00%	23/08/2021	07/09/2021
Final	0.170	100.00%	11/03/2021	26/03/2021
Interim	0.080	100.00%	17/09/2020	05/10/2020
Final	0.150	100.00%	11/03/2020	26/03/2020
Interim	0.080	100.00%	02/09/2019	17/09/2019
Final	0.150	100.00%	11/03/2019	26/03/2019
Interim	0.080	100.00%	31/08/2018	17/09/2018
Final	0.140	100.00%	09/03/2018	26/03/2018
Interim	0.060	100.00%	06/09/2017	21/09/2017
Final	0.140	100.00%	09/03/2017	24/03/2017
Interim	0.060	0.00%	08/09/2016	23/09/2016

have a small holding in AIS as a ( hopefully ) future copper producer , they recently bought a working gold mine of EVN , and are ( hopefully ) using the gold production cash-flow to help accelerate the copper project .

also BHP was trying to increase it's copper production , but has some many moving parts ( and acquisitions and divestments ) it is probably hard to use as a commodity trading proxy

 

[peter2]

Big day for copper overnight. I'm all over it and holding a bag full of copper miners.

 

[Sean K]

Big day for copper overnight. I'm all over it and holding a bag full of copper miners.

View attachment 137272

It's looking good for a break up from this longer term high and tight flag too.

 

[rederob]

Big day for copper overnight. I'm all over it and holding a bag full of copper miners.

View attachment 137272

The best part is copper prices are still 25 cents/lb below May 2021's record price and warehouse inventories remain tight:

Live warrants at LME, SFE and Comex total around 150k tonnes and despite a year's worth of high prices the supply response has not kept pace with demand.
Greater electrification globally and especially the now rapid take up of BEVs and charging infrastructure rollouts has provided a step change in typical demand and it's unlikely to be matched by near term supply.
I see copper prices into the $5 range this year and likely to hold.

 

[Sean K]

Copper continuing to wind up. Looks very tasty.

 

[Sean K]

Copper breakout.

 

[divs4ever]

my main copper exposure is via OZL ( 'free-carried ' ) and AIS ( apart from the 'usual suspects ' of BHP and S32 ) and some lesser exposure via MCR ( 'free-carried' ) where it is a co-product

it will be interesting to see if the copper price rise translates to a share price rise

( i have an order in for extra AIS , but maybe i won't get that target now )

 

[rederob]

my main copper exposure is via OZL ( 'free-carried ' ) and AIS ( apart from the 'usual suspects ' of BHP and S32 ) and some lesser exposure via MCR ( 'free-carried' ) where it is a co-product

it will be interesting to see if the copper price rise translates to a share price rise

I see a massive spike in OZL on Monday because of where both copper and gold finished overnight. I added a small parcel of OZL a few weeks back in the mid $24 range, but see upside to over $40 by next year, with $30 being a stepping stone in coming weeks.
From everything I have tracked on the EV front, production numbers this year will double, and so too will the charging network, which means manufacturers will have to scramble to get enough copper for their motors and wiring in coming years. There's no way I can see EV demand being met without the raw materials available, and there's no substitute for copper in an electric engine. So I see the 2020s as being the copper decade, not just for NEVs, but due to renewable and green initiatives across so many industry sectors.

 

[Sean K]

my main copper exposure is via OZL ( 'free-carried ' ) and AIS ( apart from the 'usual suspects ' of BHP and S32 ) and some lesser exposure via MCR ( 'free-carried' ) where it is a co-product

it will be interesting to see if the copper price rise translates to a share price rise

( i have an order in for extra AIS , but maybe i won't get that target now )

All else being equal, technical trading should see POC run after nine months of consolidation and Cu producers do very well if this break is sustained on a weekly chart.

 

[divs4ever]

All else being equal, technical trading should see POC run after nine months of consolidation and Cu producers do very well if this break is sustained on a weekly chart.

rising energy costs are my concern ( wage and other costs to a lesser degree at least near term )

just maybe some of the quirky mining services companies will get a tailwind , SXE has been doing well upgrading or converting mine power plants , and maybe things will get smoother for ANG

but watch the local dollar and remember some companies have fixed price off-take agreements ( which might put them in a margin squeeze

 

[Telamelo]

OGC Gold & Copper producer should do very well..

Oceanagold Corporation (ASX:OGC) Share Price - Market Index

Today’s OGC share price, stock chart and announcements. View dividend history, insider trades and ASX analyst consensus.

www.marketindex.com.au

 

[Telamelo]

OGC Gold & Copper producer should do very well..

Oceanagold Corporation (ASX:OGC) Share Price - Market Index

Today’s OGC share price, stock chart and announcements. View dividend history, insider trades and ASX analyst consensus.

www.marketindex.com.au

The price of Copper has hit an all time high, approaching $13,600 a tonne!