The big commodity buzz has been about shortages especially for key metals that are associated with the EV car and renewable energy revolution. Many analysts have argued that the long-run move in copper is higher. There is a shortage of supply form under-investment, and a strong demand from a shift to energy renewals and infrastructure. The tide is pulling copper prices higher.
So, what have we seen now that the copper story is at fever pitch? There has been a significant decline based on a China slowdown in the last month. Prices are still higher from the beginning of the yea, but the cost of buying copper fever has been high. Chinese copper stocks in the warehouse for delivery on the SFE are now at the highest levels since 2020. Copper in China is now selling at a discount.
If you want to be a copper trader, don't worry about the long-term, just follow the trends. This is the difference between investing and speculation, the former is long-term and the latter is short-term. One is not better than the other, but each has a different timeframe and return objective.
We can be headed into a new super-cycle, but that does not mean that the trend will always be pointed upwards.
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