hello thanks for tuning in to calkin tv i'm james preston and this is the hot performance a show
where we take a look at stocks and sectors that could be heating up in this edition
we are focusing squarely in the commodity space specifically we'll be looking at what to expect
from copper prices in the months ahead copper has had a remarkable journey in 2021 so far
with the price of the commodity rising by over 25 percent despite pandemic related issues
thanks to strong demand in china and a weaker us dollar the price of copper exceeded what 10 000
us dollars a ton for the first time in 10 years in april 2021 after trending sideways for a few
months after april copper woke up again in october trading above the ten thousand dollar mark a ton
for a number of days the rally in the copper price was somehow triggered by the global energy crisis
which forced metal output cuts from china to europe tightening commodity supply in addition
to tight supply the us federal reserve's decision to go slow on interest rate rises
despite inflationary pressure helped coppers as prices sustain their momentum
the recovery and copper demand spurred by lockdown restrictions as home owners
sought upgrades to properties also assisted the commodity's growth higher coal prices
in china which raised production cost also supported the price rise in copper this year
so that explains the price hike moving into october but now the question is why is the copper
rally losing its price momentum copper prices have taken a breather over the last month while sliding
by over 7.5 percent since mid-october 2021. the recent pullback in copper prices can be
credited to the us president's decision to select jerome powell as the federal chair for the second
time which has in turn bolstered the greenback a stronger dollar made commodities priced in
the us dollar more costly for holders of other currencies prompting weakness in copper prices
furthermore copper prices came under pressure due to renewed worries about demand in china
and anticipation of a more balanced market in the coming months an ongoing property crisis in
china has also sparked fears of subdued demand in the country it's worth noting that china's real
estate sector accounts for a huge share of copper consumption which was hit by a liquidity squeeze
in addition to these factors china's decision to cool down surging coal prices that is vital to
power the world's second biggest economy triggered a fall in copper prices to some extent the copper
prices further bore the brunt of the latest economic data in china which showed unexpectedly
strong industrial output but weakness in the property sector moreover energy shortages in china
and electricity's price hikes in europe have been posing risk of reduced demand for the industrial
metal keeping a lid on the price rise price increases have been capped by the strengthening
of the us dollar as well over recent days which is harnessing the benefit of robust inflation data
strong inflation figures in the us have bolstered rate hike expectations in the u.s making greenback
priced metals expensive for holders of other currencies it's likely that copper will indeed
pick up steam once again especially with policy revisions in china regarding the
housing crisis in the pipeline but it could be in for a shaky period over the next few months
time now for a very short break before we take a look at potential
investment options for those looking to add copper-related stocks to their portfolio
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for tuning in to cowkin tv i'm james preston and this is the hot performance program
in today's edition we are focusing squarely on copper and if you've just joined us we've
taken a look at copper's performance throughout 2021 but let's now turn our attention to some
attractive asx stock picks beginning with sand fire resources sand fire is progressing towards
completion of the acquisition of a new spanish copper mine matza under a deal this deal could
propel it to become the biggest copper pure play on the asx the deal places send fire in goodstead
to harness the benefits of copper's price growth which is expected to occur over the coming years
the next stock to focus on is bhp group although bhp's revenue is majorly dominated by iron ore
it's one of the biggest copper producers in the country the company produced 1.7 million tons
of copper in 2020 which plateaued slightly in 2021 due to a change in copper's grade
however the company expects a strong copper production for the current financial year
on the back of solid capital investment aus minerals is another copper-related
stock to consider for your portfolio oz's full-year group copper production is tracking
in line with the annual guidance the company anticipates copper production of 120 000 to 145
000 tons in the 2021 fiscal year considering the strength in the underlying commodity market
so as covert 19 lockdown restrictions continue to fade copper demand is likely to strengthen for
advanced countries heading into 2022. while supply chain disruptions may continue for quite some time
the resumption of some infrastructure projects could underpin growth in copper prices
however this is not likely to happen in the immediate future in the coming few months
the commodity market might see slowing global growth momentum at the same time inflationary
concerns could lure investors towards copper which is closely linked to the health of the
economy which could in turn offset some price falls all right well that's all for this edition
of the hot performance hope you enjoyed the show make sure to stay tuned to cowking tv for the
latest market updates business news and exclusive interviews i'm james preston signing off for now