Per Monday’s missive on the antimicrobial properties of copper, a reader writes:
“What is your play to leverage copper’s price movement?”
First, getting back to what we see as further upside for copper, an article at Bloomberg consults with the “New King of Copper Trading” Kostas Bintas of Singapore-based commodities company Trafigura.
In the bad old days of March, “the outlook for most industrial metals looked bleak,” Bloomberg notes. “Yet even then, Bintas says there were early signs copper could emerge from the crisis even stronger.”
And as the economy shakes off its lockdown lethargy, Mr. Bintas is more optimistic…
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Your Rundown for Wednesday, June 10, 2020
“Despite the noise of what the price is doing or the equity markets are doing, the most important thing is to isolate the signal that you’re getting from customers and suppliers,” says Bintas. “You can’t get more genuine feedback than that.”
Bloomberg says: “Gains have been supported by a steady stream of data showing a recovery in demand…
And Bintas says with mines shut down because of the pandemic, copper supplies are limited… even as demand — particularly for green infrastructure — has picked up.
“Copper is coming out of this crisis differently,” Bintas says. “When lockdowns were eased and people started to return to work, we were surprised to see our customers not only taking deliveries of volumes they’d already bought, but requesting more to cover themselves in case there were any further disruptions to supply.”
Even though copper prices sagged markedly in January when China went into quarantine — and then cratered in March when most developed countries followed China’s lead — the red metal has been scraping back losses most recently.
As for our reader’s question above, Freeport-McMoRan (NYSE:FCX) is a Phoenix-based company that operates a number of longstanding copper mines; in fact, the company hales itself as the “world’s premiere publicly traded copper company,” according to its website.
Yesterday, Morgan Stanley raised guidance on FCX. Morgan Stanley’s not alone. Of an additional 19 analysts, five assigned a “hold” rating while 14 called FCX a “buy.”
Market Rundown for Wednesday, Jun. 10, 2020
The S&P 500 futures are down 8 points to 3,200.
Oil’s down 2% to $38.11 for a barrel of West Texas crude.
Gold is up $10 to $1,731.90 per ounce.
Bitcoin is down $32.50 to $9,744.21.
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We’ll talk more Friday. Have a great day.
For the Rundown,