Q: When you have time ......... copper stocks have been soft of late and I assume this is in response to the EV sector which has been under pressure - yet my understanding is that the grid sorely needs upgrading, which I assume requires new copper lines, while some of the other participants in the electrical sector have done well which suggests a buoyant sector. So I am confused as future demand in particular appears to exceed available supply - and Dr Copper has underperformed the market. What is the outlook for copper?
5i Research Answer:
While AI and electrical are good signs for future demand, the metal has been weak of late largely due to worries about the strength of overall global demand. China's economy is not strong, and other than the US other economies are not exactly booming. The trickle down impact of higher rates is still being felt. Copper fell 10% in the fourth quarter. We would expect better things. AI demand is not likely to abate, and the grid still needs replacing, essentially. Now that rates have actually moved lower in North America, we could see an economic improvement. China remains a big wild card, but prices have at least stabilized a bit recently.