Base Metals & Iron Ore
Our Commodity strategists are upgrading copper from underweight to neutral, reflecting a near-term skew to the upside even as prices have lost touch with fundamentals. The recent rally has been propelled by speculative flows rather than current demand…
Copper prices are surging again after a brief pullback in the first quarter.
What is driving the renewed strength, and can it persist?
Our commodity strategists see industrial metals as detached from fundamentals. China’s credit and fiscal impulse still leads industrial metal imports, but prices have moved well above what that signal supports. The demand evidence remains weak. Chinese…
Higher oil prices threaten the global economy, warranting an underweight stance on equities. Over the long haul, industrial metals will fare better than crude.
The metals mania is fueling extreme volatility.
In particular, the price of copper has become detached from fundamentals and is vulnerable to the downside.
Maintain defensive commodity positioning as recent rallies reflect tariff distortions, not a turn in global growth. Despite soft global growth, copper, silver, gold, and shipping rates have rallied. Our Commodity strategists do not interpret this as evidence…
BCA’s Commodity strategists remain long gold/short LME copper and have initiated an outright short in LME copper as a cyclical trade. The US copper tariff will redirect supply away from the US, replenishing depleted inventories elsewhere and exerting downward…
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Messages From Commodity Curves
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This report looks at the FX implications of the Trump tariffs, and the review of our Q1 trades.
Our Commodities & Energy strategists published a special report outlining three themes they see in the space for 2025. The themes are the following: Sluggish global demand and weak industrial activity will likely weigh on cyclical commodities,…