Copper’s futures price taps $5.02 a pound
Also: tags of DHT Maritime Resources, GoviEx
Uranium and platinum below.
Laramide Resources*, Victoria Gold,
Alamos Gold, Ridgeline Minerals (all below) also are outpacing
this week.
**Trading Notice -- VZZ VDOMF -- At Close Of Report
I half-joke that I include copper as a precious metal. Precious to global growth and to our TCR choices.
My former colleague, Myra Saefong at MarketWatch, here has strategists saying the industrial metal’s 30% gain (futures contracts) since February looks “overdone.” See her article please.
My take is that the $5 copper price (at last look Wednesday $4.90) is based on largely futures speculating and is paper logic: net long positions and derivative-hedging yet not grounded in the cathode material required for roads, bridges, cars, trucks, wiring, cabling, medical devices, ad-almost-infinitem.
TCRs, see chartist Al Marden‘s copper resistance, fails and parabolics here. Exclusive.
Except for a $5.02 supply-chain blip in March 2022, I do not see anything near a $5 copper futures contract price anytime since at least 2012 — until today.
Note how I point out each time: futures contracts and not sheets of purified, smelted cathode.
I think these themes are the physical copper factors this year:
— Smelter shortages (China, India, elsewhere) of high-grade ore material. [Could be in flux.]
— China, China, China. For this entire decade, when copper prices were rising, the logic was: China is healthy. When it was down, an ailing China punctured the price.
— Genuine copper supply deficits starting this year (300,000 metric ton deficit, some say) and going out four or five years.
— A probable shortage of cargo carriers for the next several years, or if not a shortage, a tanker-deficit that is leading to much higher lease rates to carry freight (and oil) on the world’s shipping lanes.
— Oh yes, corporate and government activity is boiling. Zambia‘s copper has the White House piqued as a source of the important metal. Zambia sports a Bill Gates start-up called KoBold, its Mingomba mine compared with Ivanhoe Mines’ Kamoa-Kakula in DRC Congo. Oh and Arab sheiks among others wanting to swoop in for reasons of national security and profit.
— Also: the scrum for teetering First Quantum‘s troubled Zambia copper property from a flock of buyers whom FQM says is not in the cards. Plus: that rejected $43 billion BHP Group offer for Anglo-American, primarily for Anglo-American‘s copper and coal.
— Way out there — a looming trading scandal among copper brokers, trading houses? Far fetched I know but we have the past 35 years seen copper trading meltdowns, fraud, bankruptcies and potently levered strategies backfire — or lend fuel to copper price rallies.
The responsible view from Brien Lundin, newsletter writer and host of New Orleans Investment Conference each autumn.
“At this point, I think it’s a combination of the supply/demand dynamic starting to take effect and the idea that China’s going to do better than most supposed. Doesn’t look like a squeeze or fat-fingered trader.” — Brien Lundin
More reading? WSJ, owner of MarketWatch, published this piece, Why The World Has Gone Cuckoo For Copper.
TCRs, I continue to stick with outperforming Africa copper producer Ivanhoe Mines IVN IVPAF and sister-co, the explorer Ivanhoe Electric IE. (All told, we here at home have approx $1.25 million of stock in those two, largely IVN. I will inform our TCRs of intent to sell any amount of the two stocks. See trading notice at close of report please.)
Those looking for more speculative copper stakes or those in copper mine developers: Yukon’s Western Copper & Gold WRN; still private Argentina developer McEwen Copper (see: MUX); B.C.’s Seabridge Gold SA SEA; QC Copper QCCU QCCUF — tiny.
Naturally. royalty companies are avenues to copper: EMX Royalty EMX for the vast, China-mined copper and gold project Timok in Serbia, among others.
Updates: DHT Maritime Holdings DHT will publish its quarter and dividend after the Tuesday market close.
After the close, the oil carrier published 29 cents a share, meeting all expectations for Q1. The European and Asia shipper included an upbeat forecast:
“Chinese GDP growth at the start of the year was somewhat higher than expected. We wonder if the extensive planned Chinese refinery maintenance taking place this quarter might be in preparation for increasing runs from the second half, mirroring oil demand forecasts? Continued OPEC cuts suggest acceptance that non-OPEC supply from the Atlantic is not going away and should be afforded market share to balance the market and support oil prices, resulting in expanding transportation distances. Add to the mix a rapidly aging fleet and geopolitical unrest causing trade disruptions, and we believe it’s credible to expect rewarding times ahead.” — DHT Maritime
DHT will need to see spot lease rates of its tankers maintain or gain from an approximately $50,000 level if it is to match or exceed rates from a year ago at this time. Average rate booked is $51,000-$52,000 so far in the current Q2 period — that’s per day — compared to $70,000 to $71,000 in the same 2023 span. At present, I continue to hold and look to wait for the 29-cent dividend just announced.
Platinum’s price has overtaken palladium’s price: a catalytic converter story. I own Aberdeen Platinum Trust PPLT.
GoviEx Uranium shares starting to factor in a possible resolution in coup-torn Niger? Regardless, this is one of five uranium-cos I try tio track and own. GXU has seen its shares pummeled. The $80 million stock is getting improved bids this week for the shares.
Outpacers this week include New Mexico, Utah and Australia uranium developer Laramide Resources LAM*; Victoria Gold CGCX VITFF after a quarterly report that points to greater revenue for the rest of the year from the Yukon producer’s Eagle Gold Mine (and I simplify — see the report please).
Also: Alamos Gold AGI after rich grades are reported at its Young-Davidson Mine — see report please.
* Laramide Resources LAM LMRXF: the U.S.-centric uranium developer’s shares at $200 million are shifting into a slot that could accommodate larger investors.
Marc Henderson, Toronto-based CEO, tells me Wednesday the stock likely is getting placed on fund managers’ screens alongside mega-U.S.-uranium performers such as Energy Fuels UUUU, Uranium Energy EUC and enCore Energy EU (a partner) — each with market values four to 14 times greater.
“I just think we are quietly playing catch up. Being in two of the three favored nation state jurisdictions (U.S., Canada, Australia) n this post-Russian uranium ban world likely doesn’t hurt either.” — Marc Henderson of Laramide
PLEASE REVIEW this earlier report re: GoviEx Uranium, DHT Maritime and platinum.
**Trading — intent to sell: TCRs, I will wait to sell part of my Val-d’Or Mining stake VZZ VDOMF, some of it held since 2012. I have made and lost money with Glenn Mullan‘s VZZ. The Québec and Ontario explorer and developing royalties holder in the Abitibi Gold Belt awaits developments from partner Eldorado Gold, which is earning into several VZZ concessions in Ontario and in Québec. Release on that here please.
— Thom Calandra
The Calandra Report
PayPal $179 Yearly: Recurring The Calandra Report
PayPal $229 Yearly Non-Recurring The Calandra Report
Thom Calandra is a writer and an investor. Research and material are meant as editorial opinion. He is not a professional investment adviser. Please do not consider his reporting as a recommendation to buy or sell securities.