BlackRock’s global head of thematic and sector investing, Evy Hambro, has highlighted the fundamentals building under copper as the reason why it will rebound.
In an interview with Bloomberg, he said while the current price of copper had been depressed it was only a matter of time until the fundamentals starting to weigh on traders’ minds.
“We’re obviously seeing some slower data coming out of many economies around the world,” he said.
“The supply-side of copper is the one that’s really intriguing to us. You have a lack of investment into new supply, combined with high levels of disruptions this year and low levels of inventory in warehouses around the world does make the copper market look pretty tight.”
“As we look forward into the future with demand likely to rise with increased electrification, and the move to electric vehicles and so on that’s taking place the prospects for that supply-demand balance are ones where we should start to see prices trading higher than lower,” Hambro added.
While Hanbro said the building undersupply in the market was the most fundamental reason for his rebound call, there are also other reasons why copper may rebound in the next six months.
Copper, thanks to its use in building and manufacturing, is often seen as a proxy for economic development.
As such, the ongoing trade tension between China and the US has dragged on the mineral — as the market thinks China is in the weaker position, leading to its economy suffering under prolonged tariffs.
But with tentative moves made to resolve the tariff impasse in recent weeks, notably at the G20, easing tensions could add another trigger for copper.
It’s a copper exploration and development company focused on a new porphyry district discovered in a previously unexplored part of Western Australia’s Central Wheatbelt.
In fact, the Caravel Copper Project is the largest copper resource in Western Australia – at 1.86 million tonnes contained copper at 0.28 percent cut-off.
This content is produced by Star Investing in commercial partnership with Caravel Minerals. This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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