Glencore CEO Gary Nagle today said something today that I think perfect captures the global copper market and traders' feelings about it.
"There’s a huge deficit coming in copper, and as much as people write about it, the price is not yet reflecting it," he said.
This reflects the conundrum that traders are struggling with. Generally, when something is known to the market it's priced in. Yet there is an abundance of evidence that there isn't enough copper in the pipeline. It takes at least 10 years to built a greenfield copper mine so you can see what's in the pipeline and the supply isn't there. Moreover the green transition will be an enormous call on supply with some suggesting we'll need as much copper in the next 25 years as in the previous 5000 years.
Again, this is all well-known to anyone paying attention but metric after metric shows both the commodity and miners cheap.
From his perspective, Nagle sees copper hitting $15,000/tonne in London from $8400 currently.
"We want to see that deficit,” Nagle said, adding that the company wouldn't lift output until the world is “screaming” for copper.
Chart by TradingView