The Bull Case for Copper

Published on
February 28th, 2019
Duration
17 minutes

The Bull Case for Copper

Trade Ideas ·
Featuring Tony Greer

Published on: February 28th, 2019 • Duration: 17 minutes

Tony Greer of TG Macro runs through the fundamental case for copper. He hits on supply & demand, notes key drivers to the thesis, and explains how to take advantage of the opportunity, in this interview with Justine Underhill. Filmed on February 27, 2019.

Comments

  • GR
    Garey R.
    26 March 2019 @ 19:35
    Great job on the presentation! However, a couple of factors I believe that are worthy in considering as headwinds or risks to a bullish copper case: - Forecast supply deficits neglect to consider global copper scrap used as primary alternatives. Higher price primary prices have always generated higher global and regional copper scrap reclamation. - China's environmental restrictions effecting the amount of imported copper scrap is creating regional over supplied positions in developed countries. This will be somewhat offset in the future as copper cathode consumers (manufacturers) add capacity to handle scrap copper versus solely relying upon primary.
  • BE
    Bruce E.
    3 March 2019 @ 16:38
    Nice presentation Tony! I do have to side with Robert, China has not bottomed, and I think DXY gets to at least 100ish, and maybe a whole lot more. Silver very weak here too. Good luck, I think you might be a couple years early.
  • JR
    J R.
    3 March 2019 @ 14:51
    The LT bull case, guys, check this out ==> https://www.youtube.com/watch?v=-ZxolqmJmvU
    • TG
      Tony G. | Contributor
      4 March 2019 @ 13:01
      Thank you A.P. Great additions to the thesis.
    • JR
      J R.
      6 March 2019 @ 09:27
      You are welcome, here is some more (7 videos, on the right column), that look at fundamentals and some value investing plays you can dig into. Happy to hear your thoughts!
    • JR
      J R.
      6 March 2019 @ 09:27
      http://bit.ly/2VEf4V9
  • JR
    J R.
    1 March 2019 @ 08:12
    Hey Tony, to add to your bullish case (very well articulated) - Indian demand set to surge: http://bit.ly/2Vwj6PB
  • RS
    Robert S.
    1 March 2019 @ 07:40
    DXY has some work to do could easily see it pullback to 92.30 and observant eyes will have noted gold rallied this yr even with pretty strong dollar A CHANGE even if DXY goes new highs see it PB very sharply from there .Quite a bit bullish option activity on $FCX looking at 17 area June expiration ..That stock has been a nightmare since 2014 but on a purely technical basis can see at least 22.
  • AC
    Andrew C.
    1 March 2019 @ 03:40
    Great ideas Tony, I already have some copper miners in my portfolio for EV demand. You talked about LME stockpile being low, I have heard on another podcast that there are other stockpiles around the world that are reasonably stocked. There will still be a shortage of supply this year from mines, but these stockpiles should make it a slower response. Do you have any comments on these other stockpiles levels? Shanghai, NYMEX, and ...
    • JF
      Jonathan F.
      3 March 2019 @ 16:05
      most importantly are stockpiles in non-bonded warehouse in china which are tracked word of mouth/inspection as no real statistics. regarding shangai copper inventory, at around 124K Mt's of copper, up 80k tons since the end of Jan 2018. Also need to look deeper into numbers. The real numbers to look at are the on-warrant inventory. On-warrant means tons that can be taken out of the warehouse. Off-warrant is material in warehouse but is earmarked for delivery by another party so not freely available to trade.
  • RM
    Robert M.
    1 March 2019 @ 00:54
    Tony: "How are iron ore & copper rallying against the narrative of slowing global and particularly Chinese growth here?" Good question Tony, but you didn't stay with it. Instead we get a 10 minute spray on a panoply of minor idiosyncratic and irrelevant though exciting longer term factors (his stop will be hit the minute DX rallies and the global growth downturn resumes). IMO it is just a bear market rally. Copper is going nowhere until global growth bottoms and DX tops out - which IMO isn't yet. They are the major drivers at the centre of this debate and so many other assets, but usually missing from RVTV analyses.
    • TG
      Tony G. | Contributor
      1 March 2019 @ 02:48
      I can live with that criticism. If what I presented were MINOR and IRRELEVANT thoughts Robert then please enlighten the conversation with the more relevant factors of the trade. I challenge my stop will be hit the minute DX rallies because it doesn't look like its rallying right now - that thought is nonsense Robert. Bear market rally that's making an awful lot of technical noise. I have seen fund managers get CARRIED OUT, CLEANED OUT, and WALKED HOME on the idea that "Copper is going nowhere." That's like saying "Natural Gas is going nowhere" and watching it quintuple twice in my lifetime. I literally think if you believe the dollar is the central driver in any market debate that I will be the one making money and you won't. Happy to discuss further Robert M.
    • RI
      R I.
      1 March 2019 @ 03:41
      Isn’t it obvious? The answer in a few words: stagflation = growth decelerates while inflation accelerates.
    • JW
      Joel W.
      2 March 2019 @ 19:30
      Thanks Tony and Robert M. I get value from trade ideas even when I disagree, and I get LOTS of value from substantive discussion of a trade idea.
    • AR
      Abishek R.
      9 March 2019 @ 10:44
      As much as I love Tony and the ferocity with which he cracked beers on the market huddle, I think I agree with Robert here. Electric cars is a total non-starter for Cu surge now or even in 2022. - ICE cars have ~ 50pounds of Cu/car - Electric vehicles ~ 180Cu/car - An optimistic scenario is that only 15% of the world’s cars will be electrified by 2030
  • JL
    John L.
    1 March 2019 @ 00:30
    Very comprehensive TG, or is it TS :-)
    • TG
      Tony G. | Contributor
      1 March 2019 @ 02:48
      Thank you John.
  • BF
    Brad F.
    28 February 2019 @ 23:23
    One of the best trade idea videos I have seen. Thanks Tony.
    • TG
      Tony G. | Contributor
      1 March 2019 @ 02:48
      Thanks Brad.
  • TR
    Travis R.
    28 February 2019 @ 21:29
    Great interview. If electric vehicle demand projections are met, copper demand is set to heat up.
    • TG
      Tony G. | Contributor
      1 March 2019 @ 02:49
      It is set to heat up.
  • RM
    Ron M.
    28 February 2019 @ 19:42
    Love to see this level of forensics done on $Gold and GDX
  • JP
    John P.
    28 February 2019 @ 19:03
    filler while we wait for something substantial
  • KF
    Ken F.
    28 February 2019 @ 16:38
    $HBM
  • PB
    Pieter B.
    28 February 2019 @ 16:36
    Thanks a lot Tony & Justine! I learned some new things and added this ETF to my portfolio for a potential buy in the future!
  • SS
    Steve S.
    28 February 2019 @ 15:53
    That copper ETF is not very liquid. Only $70 mil in assets. Tiny. I much prefer your Southern Copper Stock Idea. Nice dividend and up almost 20% in the last 2 weeks.
    • TR
      Travis R.
      28 February 2019 @ 21:31
      Speculative, leveraged way to participate would be NAK. EPA is major risk.
    • TG
      Tony G. | Contributor
      1 March 2019 @ 02:50
      SCCO looks great here - it often rallies, and then does a U-turn. We'lll see if they get it right this time.