The doctor likes what it’s hearing

Copper prices have been moving sideways for months but they have found new life today as virtually every commodity rallies and the risk mood continues to improve.

US copper is up to $4.60 from $4.43 at yesterday’s close, breaking the range top of the past three months and rising to the highest since October 22.

This could be the start of a resolution of the bull flag that’s been slowly unfolding in copper. It will need to $5 to kick into overdrive.

On the fundamental side, most analysts see a surplus this year in copper supplies as new projects come online. However that quickly reverses in the years ahead as massive demand for the greening of the grid far outstrips supply. Mixed in is the inventory picture, which is very light in Europe. China may also begin restocking — and remember that China is by far the world’s largest consumer of copper.

I suspect that sometime in 2024-25 we will get a super-spike in copper prices because bringing on greenfield production takes 5 years of permitting and the pipeline is thin.

Few commodity reports got more attention in the commodity world last year than this one: