Posted on 05/08/2021 8:51:07 AM PDT by blam
On the heels of record highs in Iron Ore and Steel earlier this week, as commodity demand soars on the back of economies emerging from COVID lockdowns (demand) and various supply chain/operational issues (supply); copper prices surged to an all-time high this morning as Chinese investors unleashed fresh demand following a five-day holiday.
Source: Bloomberg
Bloomberg Intelligence strategist Mike McGlone said that “the reaction of copper to $10,000-a-ton resistance may set the inflation vs. deflation tone for years”
As Mining.com reports, the reopening of major industrial economies is sparking a surge across commodities markets from corn to lumber, with tin climbing above $30,000 a tonne for the first time since 2011 also on Thursday.
Copper has gained 28.1% since the end of last year and is up 114.9% from its 2020 low, hit in March of that year amid the global economic fallout as countries locked down their populations to contain the spread of covid-19.
“The long-term prospects for metals prices are ‘too good’ and point to higher prices in the next few years,” Commerzbank AG analyst Daniel Briesemann told Bloomberg.
“The decarbonization trends in many countries — which include switching to electric vehicles and expanding wind and solar power — are likely to generate additional demand for metals.”
(Electric vehicles use 7 times more copper than do gasoline vehicles)
Trading house Trafigura Group, Goldman Sachs, and Bank of America also expect copper to extend gains.
“Copper could spike to $13,000 a tonne in coming months, partially over low inventories,” Bank of America said.
“Copper prices will remain strong as a continued rebound in global PMIs bolstered investors’ bullish sentiment,” Citic Futures Co. said in a note.
On the supply side, Peru reported a 19% jump in March copper output, potentially offering some relief to tight global supplies, but a bill to dramatically increase taxes in Chile, the biggest copper-producing nation, threatens to curtail future output and supercharged the metal’s rally even further.
(snip)
One of my big pet peeves is when people draw longer term support support and resistance without factoring in the currency valuation differences.
The lines are BS for starters, and you are spot on about currency valuation. The USD is signficantly weaker today compared to a year ago.
Long term DOW charts are another pet peeve. The companies in the DOW are totally different today than 20 years ago so comparing values from years ago and drawing trend lines is silly. Add in the currency and it gets really stupid.
It would be the same as having a 20 year chart of the values of cars where you replace any car that goes over 5 years old with a new one.
Lol... How original... Well at least this conversation seems to be helping with your vocabulary set.
Keep working at it and instead of being a one hit wonder you might get more than one hit on the charts... :)
Oh please It was my attempt at mending a fence with you
Mending a fence would be giving “benefit of the doubt”. This I would and have always given. And have even defended others because someone calling them a Karen was in the wrong and out of place because they did not know the whole background and story behind it.
So now do we want to engage and debate with intelligence or are we back to one liner derogatory comments that have no basis in fact or true intent? Do not reach out and bite off more than you can chew... You reached for the wrong pitch and will strike out.
Even though I am really invested in the copper business, I was just teasing my friend with a sarcastic comment. You decided to ride in as a Knight on a white horse and jump in the middle of something you had now clue about.
Prudence and minding your own business was in order here, I would have waited to see where it went and if it got any worse before I kicked the white horse of Knighthood. Look... What do we not like about Liberals? The fact that they do not mind their own damned business... Just like you.
Are here we are... Had my friend asked I would have told him I was being sarcastic and if you had stayed out of something that was not your damned business you would not still be wasting Bandwidth.
It is simple logic as I said from the beginning...
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