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Copper above $4 per pound is like crude oil above $100 per barrel, except even rarer.
We gotta start shorting this baby.
China started putting feelers out for some cheap inventory to buy for strategic purposes. However, that sniffing around soon became a mad dash for metal to satisfying ravenous demand for Chinese exports and physical goods During lockdown.
Chinese export demand will likely suffer as consumers shift back to spending on services in a reopening economy at the expense of copper-intensive goods. (i.e., People are going to go on vacation, cinema, resteraunts instead of upgrading a major home appliance.)
China’s influence over the copper market is massive: its industries consume more than half of the world’s copper tonnage every year.In a global copper market of about 25 million tonnes annually, the International Copper Study Group (ICSG) estimates that 2020 saw a deficit of roughly 600 thousand tonnes (2.4%)—a very tight market, thanks entirely to a massive Chinese import boom. It ain't going to last ?
Chinese copper demand can be broadly broken down into four broad buckets:
1. real estate construction,
2. electrical grid investment,
3. export demand,
4. strategic inventories.
Demand was running so hot and prices rising so quickly that Beijing shifted its attention to what it increasingly saw as destabilising commodity inflation. The Chinese government clamped down on financial speculation and Beijing’s strategic inventory managers came full circle by returning some of the accumulated stocks back to the market to cool prices.
Strategic inventories are already being unwound. Chinese export demand will likely suffer as consumers shift back to spending on services in a reopening economy at the expense of copper-intensive goods and the last thing Beijing wants is another housing cycle.
Copper prices will likely face continued downside pressure as favourable demand conditions normalize over the coming months, though logistical bottlenecks and ongoing supply-side risks could add sporadic support. Longer-term energy transition demand expectations are strong but the timing of any material handoff from Chinese industry to broader global net-zero investments remains an unanswered question.
The price of copper is loony tunes man.
Chinese imports saved copper in 2020. Question is all things considered what is next for copper over the next 12 months ?
If Cooper hasn't normalised by March. I'll run down Sauchihall street naked.
Hey killer Prospector dialect this episode Mike! Killer!
ReplyDeleteWe gotta start talking about copper man !
ReplyDeleteCopper above $4 per pound is like crude oil above $100 per barrel, except even rarer.
We gotta start shorting this baby.
China started putting feelers out for some cheap inventory to buy for strategic purposes. However, that sniffing around soon became a mad dash for metal to satisfying ravenous demand for Chinese exports and physical goods During lockdown.
Chinese export demand will likely suffer as consumers shift back to spending on services in a reopening economy at the expense of copper-intensive goods. (i.e., People are going to go on vacation, cinema, resteraunts instead of upgrading a major home appliance.)
China’s influence over the copper market is massive: its industries consume more than half of the world’s copper tonnage every year.In a global copper market of about 25 million tonnes annually, the International Copper Study Group (ICSG) estimates that 2020 saw a deficit of roughly 600 thousand tonnes (2.4%)—a very tight market, thanks entirely to a massive Chinese import boom. It ain't going to last ?
Chinese copper demand can be broadly broken down into four broad buckets:
1. real estate construction,
2. electrical grid investment,
3. export demand,
4. strategic inventories.
Demand was running so hot and prices rising so quickly that Beijing shifted its attention to what it increasingly saw as destabilising commodity inflation. The Chinese government clamped down on financial speculation and Beijing’s strategic inventory managers came full circle by returning some of the accumulated stocks back to the market to cool prices.
Strategic inventories are already being unwound. Chinese export demand will likely suffer as consumers shift back to spending on services in a reopening economy at the expense of copper-intensive goods and the last thing Beijing wants is another housing cycle.
Copper prices will likely face continued downside pressure as favourable demand conditions normalize over the coming months, though logistical bottlenecks and ongoing supply-side risks could add sporadic support. Longer-term energy transition demand expectations are strong but the timing of any material handoff from Chinese industry to broader global net-zero investments remains an unanswered question.
The price of copper is loony tunes man.
Chinese imports saved copper in 2020. Question is all things considered what is next for copper over the next 12 months ?
If Cooper hasn't normalised by March. I'll run down Sauchihall street naked.
I like this guy he is brilliant at studying the " physical side " of the oil markets. He has me sold on copper.
ReplyDeletehttps://commoditycontext.substack.com/p/dr-copper-still-studying-in-china
Not only is it logical it makes perfect common sense.
Big Orrin should be in your top 10 list of followers on Twitter.
ReplyDeletehttps://mobile.twitter.com/Big_Orrin
Regulators should make "luck" punishable by a prison term.
ReplyDeleteWhen you're elite you can celebrate losing tons of money.
ReplyDeleteBeing compared to Joe Pesci... that's gotta be a compliment :)
ReplyDelete"Being compared to Joe Pesci... that's gotta be a compliment."
ReplyDeleteIt is! LOL!
Footsoldier,
ReplyDeleteI've been following Big_Orrin for a long time.
He's brilliant Mike one of the best.
Delete