The analysts at Scotiabank made a nice argument that copper is set up for a near-term rally and backed up their argument with a collection of charts. I am absolutely bullish on copper in the medium term, as I am confident a supply deficit looms unless the entire world goes into a significant recession.
But I thought I’d go through Scotia’s argument about the near term, as food for thought.
Setting the stage: worries about global trade wars and slowing growth in China have punished the price of copper, which is now down 19% since mid-summer.
Copper is the second-worst performing metal in 2018 year to date; only zinc has fallen further, but it did so after making immense gains in the previous 18 months. Another good way to test the waters of copper demand is to see how much of a premium over the spot price traders are paying to get their hands on high quality copper cathode today. In Shanghai, those copper cathode premiums have risen substantially over the last two months, from US$68 per tonne in July to US$90 per tonne today. To me, copper is a market where today’s macro anxieties have overwhelmed tomorrow’s strong fundamentals. That will not last long because copper is such an active market. |
In her letter, Resource Maven explains what she is buying and selling, and why. Maven has bought into several of the markets best - performing stocks well ahead of the curve. She regularly identifies exciting new exploration opportunities and manages the inherent risk by selling some into speculative gains. And the mine builder and operator stocks that form the basis of the portfolio give strong, ongoing leverage to the rising prices of gold and silver. She has your precious metal bases covered.
Hi Gwen: I was going to write a couple of days ago because I had not received anything regarding my subscription, so was happy to receive this yesterday.
I guess it was sometime in 2017 when I first subscribed to the Maven Letter because I was very disappointed with where my _____ newsletter subscriptions were going. I have been very pleased with both the style and contents of the letter, it reflects my interest in the junior market. I was really pleased with your excellent piece in the last issue regarding PP's and "free trade dates". But, more than anything I thank you for the Premium Service. It is a service that is excellent. In the past year we have had a number of issues that have soared and others that have been just great. There has only been one that disappointed, but even on that one I managed to almost break even and still have the warrants. Many thanks for a job well done.
I am 74 years old and despite my age, my risk tolerance is still considerable. I like base metals, but most of all I like the mine stocks you cover in your Maven letter. Thanks again for your kindness and congratulations on your work.