Is copper the New Gold?

Thematic Spotlight by Plenisfer

The price of copper is up 50% from its March lows. At Plenisfer, we see the copper market to be driven by three factors:
1) The expectation of strong demand supported by the cyclical recovery, urbanisation and moderate GDP growth;
2) the longer-term support we expect for the commodity driven by the ‘electrification’ theme as the drive for sustainability continues;

3) The ongoing supply issue due to lack of investment combined with environmental issues.

We believe the combination of these 3 drivers could lead to a material uptrend in copper price in the coming years.

The recent chart from The International Copper Study Group confirms that the copper market has been undersupplied into summer 2020 and is significantly below both 2019 and the 5-year average supporting our view.

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Source: Bloomberg & Plenisfer Investments SGR 3/12/2020

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