Copper Teetering on a Breakout: Part III | Australian Markets

Today, I’ll proceed our deep dive into the copper market and clarify why in the present day’s setup is essential for buyers.

If you missed our final version, you’ll be able to test it out right here.

That’s the place I lay out the setup, the exceptional parallel from 20 years in the past, and elements that would drive copper a lot increased in 2025.

But there’s one thing else no one’s taking note of, a issue that’s maybe more important than all of the others mixed:

Copper’s forgotten hyperlink to national rearmament

You see, copper is used extensively throughout munitions and different navy {hardware}.

That’s why the largest copper booms in historical past have occurred during main battle.

To be clear, I’m NOT hoping we’re heading into one other main world battle.

However, as copper strikes increased, it’s essential to unpack what would possibly drive it increased past the simplistic mainstream narrative, like tariffs and US copper imports.

History reveals that conflict and national rearmament are the only most important drivers of demand for copper.

To show you what I imply, right here’s a chart of copper costs going back virtually 180 years:

As you’ll be able to see, copper’s most vital spikes are synonymous with conflict.

It’s a forgotten hyperlink, maybe as a result of the final great copper growth was pushed by Chinese industrial growth.

Back then, copper surged to over $4.60 per pound, peaking in 2011.

Yet, adjusted for inflation, the early 2000s commodity growth was a whimper in comparison with what occurred during ‘the war years.’

In actual phrases, copper skyrocketed to over $7 per pound during WWI, virtually DOUBLE the degrees achieved within the China fuelled commodity growth of the early 2000s.

It additionally surged during the US Civil War, the Korean War, and the Vietnam War within the Seventies.

But as you may need observed from the chart above, WWII was an exception.

Copper remained flat after the US authorities fixed costs to extinguish hypothesis on this critically important ‘war’ steel.

So, what’s historical past telling us?

Metals carry out extraordinarily nicely amid political chaos and geopolitical chest beating.

Given that the world has fallen into a darkish part of weakened diplomacy, copper’s latest spike is probably regarding for world peace.

This would possibly offer some clarification for the massive transfer in 2025.

But as I’ve proven you, this might nonetheless be the early phases of one thing a lot greater…

Last month, Trump made threats to desert NATO.

That means, when Europe wants its help most, Uncle Sam is NOT offering Europeans assured safety.

That despatched EU leaders into a frenzy final month.

In response, Germany introduced it could DOUBLE navy spending, up a whopping 5% of GDP.

But that’s solely step one.

German leaders have put in movement their want to develop into ‘the backbone of defence in Europe.’

Effectively doubling down on their navy spending to fill the US-NATO void.

Rearmament throughout Europe appears to be like sure.

And it follows bulletins by China, the world’s second-largest navy, final month, asserting massive will increase to its navy funds.

Whichever approach you sq. it, the outlook for copper is powerful

I believe increased costs will mix all of the demand elements I’ve outlined this week.

That maybe makes in the present day’s copper setup even more engaging than the early 2000s growth, which was fuelled solely by Chinese growth.

But the important thing level…

Global capital appears to be like set to pivot back to commodities after a decade-long hiatus.

Just prefer it did 20 years in the past.

I consider we’re approaching a historic juncture on this market.

Last month, I issued two buy alerts to my premium members at Mining Phase One. Ramping up our publicity to copper.

Copper now makes up virtually half of our portfolio at MPO!

With a focus on juniors, Mining Phase One is the place to be if you happen to actually consider within the copper alternative.

You can discover out more right here.

But if you wish to play it secure and restrict your publicity to producers, that’s what I offer readers at Diggers & Drillers.

This is our entry-level service, which covers bigger cap stocks throughout the mining area.

You can discover out more right here.

But no matter direction you select, producers or the more speculative juniors, copper stays a core commodity on this commodity cycle.

I’ve proven you how Dr Copper can be utilized as a market bellwether, however to benefit from that information, you need to know the price motion and be prepared to invest accordingly.

Right now, copper is signalling power.

2005 supplied us the playbook on what may occur subsequent.

Any pull-backs from right here SHOULD be considered as a shopping for alternative.

Regards,

James Cooper,
Editor, Mining: Phase One and Diggers and Drillers

P.S. My colleague Callum Newman has his own take on the copper market, it’s nicely price listening too, and you’ll entry it right here.