Comex copper futures (HG1:COM) settle at a record high $4.938/lb, +3.3%, capping a 10%-plus gain in the red metal since Russia launched its invasion of Ukraine a little more than a week ago.
Copper producers Freeport McMoRan (FCX +1.8%) and Teck Resources (TECK +2.8%) jump to new 52-week highs; ETFs: COPX, CPER, JJCTF, JJC
“The market is in a panic mode in terms of supply,” T-Commodity’s Gianclaudio Torlizzi tells Mining.com, adding that he expects prices will keep rising while conflict rages in Ukraine.
Copper already was in a strong fundamental position, with the global market in an underlying deficit; on the eve of Vladimir Putin’s invasion, copper inventories at London Metal Exchange registered warehouses totaled less than 70K metric tons, their lowest level since 2005.
Russia is not a top copper player, producing 3.5% of the world’s supply, but it ranks alongside Australia as the world’s third largest copper exporter.
Chile, responsible for more than 25% of global copper production, recorded its lowest January output since 2011, according to the latest government figures.
“Conditions in the copper market look encouraging, [but] the relative risk-reward and the valuation picture of COPX ETF are not too appealing,” The Alpha Sieve writes in a newly published analysis on Seeking Alpha.
