Update on Copper
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Following recent news that Beijing was to release several commodities from its strategic reserves to counter the rapid price rises in June, Copper has corrected some from its recent peak in May.
Read the earlier article on copper here.
Having said that, ATEC observes that the price of the commodity has stabilised in recent days. If this is all the ‘damage’ to be had, then it speaks volumes to the strength of the fundamentals of the metal. PBOC having administered its first RRR cut last Friday, is also a clear indication of where they want growth in the middle kingdom to head. Hence, we will be watching for further signs of life in this space. Perhaps the missing trigger is a weakening of the dollar.
As mentioned, the underlying structural drivers of Copper demand, being the concerted move globally towards being carbon neutral, coupled with the lack of new major supply coming on, continues to pique our interest here.
Names of interest include the likes of JiangXi Copper and Sumitomo Metal Mining, although this will obviously involve all Copper related names.
