Copper is ready for primetime

How Copper Today Looks Like Uranium Last May

At the risk of sounding like a permabull and broken record, I have been bullish copper since mid-2022 when the metal collapsed just as the Chinese real estate crash began to unravel and Evergrande spiraled into a crisis. The metal went from briefly nudging an all-time high above $5/lb in March 2022 and then cratered to $3.14/lb by mid July. At this point I became very vocal (links here and here among others) about how, despite the prospect of an ongoing collapse in Chinese construction demand that could last for years, the commodity itself was seeing bizarrely tight supply/demand balances and a new narrative forming around electrification/infrastructure/grid/India. None of this was new or extraordinary, as Jeff Currie and Goldman had been pounding the table on copper since early 2021…but the metal continued to run into trouble between tepid global economic growth in 2022-23 and destocking of channels on higher rates everywhere. It has chopped around $3.50-4.20/lb for almost two years now:

We have seen these 10% rips toward/through $4 before… so what makes this time any different? If you have not already, I would encourage you to read my commodity framework around Rolling Crackups (here). And then I want to walk you through an eerily similar analog.