Goldman Sachs on#copper: The relationship between inventories and timespreads—spot prices versus forward prices—is highly non-linear for industrial metals, including#copper. The boost to timespreads from a drop in industrial metal stocks tends to be modest when stocks are within historical norms, but rises sharply when dropping to depletion level lows. Our metals team expects that large deficits from Q2 will push the#coppermarket into the steep scarcity pricing part of the stocks-timespreads curve and backwardation in H2. The estimate that current#copper1/12 month timespreads look about 2 standard deviations (~$650/ton) too low vs. fair value and the non-linear#coppercurve supportour bullish copper call that the#copperprice will jump 65% by 2025.
RXM Price at posting:
23.0¢ Sentiment: Hold Disclosure: Held
