Please disable Ad Blocker before you can visit the website !!!

Copper LONG

by SignalFactory   ·  September 8, 2020 | 07:54:30 UTC  

Copper LONG

by SignalFactory   ·  September 8, 2020 | 07:54:30 UTC  

Copper prices have experienced a remarkable resurgence since the late March crash, hitting two-year highs last week, and Goldman Sachs believes the rally has further to run.

Often seen as a bellwether for the global economy, copper prices plunged at the end of March as the coronavirus pandemic spread throughout the world and sent markets tumbling.

However, the spot price has recovered rapidly from $2.1195 a pound on the New York Mercantile Exchange on March 23 to $2.9580 a pound on Friday. It is up 5.87% for the year and 9% for the quarter, initially buoyed by a sharp pickup in Chinese demand.

“While this contrasts sharply with the c.5% average decline in share prices for the Big 4 diversified miners (Anglo, BHP, Glencore, RIO), we remain bullish on the sector on a global economic recovery, led by China,” Goldman Sachs metals and mining analysts said in a note Friday.

Goldman Executive Director Jack O’Brien and his team attributed their optimism in part to a recovery in the autos and appliances sector, ongoing strength in the Chinese property market, and the second-highest single-month credit issuance in China on record. A weaker dollar and rising global inflation expectations are also expected to support copper prices going forward.

Copper remains Goldman’s “favorite” commodity on the basis of cyclical and structural support and ongoing supply issues, with Glencore and BHP the companies best positioned to benefit from rising copper prices, according to the bank.

“Recent data points have been supportive, with a tight demand picture increasingly emerging as persistent on-shore demand in China has seen LME (London Metals Exchange) inventories fall to the lowest level since 2005 and falling treatment fees signaling a tight concentrate market,” the note said.

“Our view remains that copper can remain stronger from here as Chinese property demand remains at elevated levels, and the supply-side continues to deal with the effects of Covid-19.”

Supply concerns linger:

In assessing the supply outlook, Bank of America strategists noted Friday that copper mine supply had been in decline, while refined supply has increased. They suggested that this divergence is not sustainable, given the usual causal link between the two, while a lack of staff on sites raised the risk of disruptions to mining companies.

“Hence, against the ongoing headwinds to mine production, there is a risk to the sustainability of global refined production increases of 2.5% in May,” Bank of America said in a research note.

BofA strategists highlighted that baseline mine supply growth had fallen steadily in recent years, with copper concentrates production in 2020 hovering at roughly the same levels as in 2016.

“While output should rebound next year, we remain concerned that unexpected losses may increase as miners especially in Chile have had only essential staff on-site in recent months,” they said.

“Linked to that, we have factored in the usual disruption allowance of 6% for 2021, which implies a deficit of 188Kt; yet, there is a risk that the shortages may end up being much bigger.”

Copper LONG (Buy)

ENTER AT: 3.0945

T.P_1: 3.1860

T.P_2: 3.3120

S.L: 2.9430

All information on this website is of a general nature. The information is not adapted to conditions that are specific to your person or entity. The information provided can not be considered as personal, professional or legal advice or investment advice to the user. This website and all information is intended for educational purposes only and does not give financial advice. Signal Factory is not a service to provide legal and financial advice; any information provided here is only the personal opinion of the author (not advice or financial advice in any sense, and in the sense of any act, ordinance or law of any country) and must not be used for financial activities. Signal Factory does not offer, operate or provide financial, brokerage, commercial or investment services and is not a financial advisor. Rather, Signal Factory is an educational site and a platform for exchanging Forex information. Whenever information is disclosed, whether express or implied, about profit or revenue, it is not a guarantee. No method or trading system ensures that it will generate a profit, so always remember that trade can lead to a loss. Trading responsibility, whether resulting in profits or losses, is yours and you must agree not to hold Signal Factory or other information providers that are responsible in any way whatsoever. The use of the system means that the user accepts Disclaimer and Terms of Use. Signal Factory is not represented as a registered investment consultant or brokerage dealer nor offers to buy or sell any of the financial instruments mentioned in the service offered. While Signal Factory believes that the content provided is accurate, there are no explicit or implied warranties of accuracy. The information provided is believed to be reliable; Signal Factory does not guarantee the accuracy or completeness of the information provided. Third parties refer to Signal Factory to provide technology and information if a third party fails, and then there is a risk that the information may be delayed or not delivered at all. All information and comments contained on this website, including but not limited to, opinions, analyzes, news, prices, research, and general, do not constitute investment advice or an invitation to buy or sell any type of instrument. Signal Factory assumes no responsibility for any loss or damage that may result, directly or indirectly, from the use or dependence on such information. All information contained on this web site is a personal opinion or belief of the author. None of these data is a recommendation or financial advice in any sense, also within the meaning of any commercial act or law. Writers, publishers and affiliates of Signal Factory are not responsible for your trading in any way. The information and opinions contained in the site are provided for information only and for educational reasons, should never be considered as direct or indirect advice to open a trading account and / or invest money in Forex trading with any Forex company . Signal Factory assumes no responsibility for any decisions taken by the user to create a merchant account with any of the brokers listed on this website. Anyone who decides to set up a merchant account or use the services, free of charge or paid, to any of the Forex companies mentioned on this website, bears full responsibility for their actions. Any institution that offers a service and is listed on this website, including forex brokers, financial companies and other institutions, is present only for informational purposes. All ratings, ratings, banners, reviews, or other information found for any of the above-mentioned institutions are provided in a strictly objective manner and according to the best possible reflection of the materials on the official website of the company. Forex trading is potentially high risk and may not be suitable for all investors. The high level of leverage can work both for and against merchants. Before each Forex investment, you should carefully consider your goals, past experience and risk level. The opinions and data contained on this site should not be considered as suggestions or advice for the sale or purchase of currency or other instruments. Past results do not show or guarantee future results. Neither Signal Factory nor its affiliates ensure the accuracy of the content provided on this Site. You explicitly agree that viewing, visiting or using this website is at your own risk.

Signal Factory is now on Telegram

make sure to join our Telegram channel now and you will not miss any update