Why Copper’s Rally Might Just Be Getting Started (JJC)

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October 30, 2017 6:06am NYSE:JJC

From Collin Kettell: In this interview, metals analyst Anthony Milewski discusses how the London Metal Exchange gathering takes place this week. It is a meeting of all of the producers and consumers for base metals in London.


It’s a time when they come together and discuss the market trends, plan and may even begin putting together contracts for specific base metals. It often sets the tone for the year. Last year cobalt was the big news out of LME week. This year Anthony thinks there will greater interest centered around nickel.

Last year the cobalt trade got a lot of attention and this year will focus will likely be on nickel. There is a bifurcation of the nickel market. He thinks that we will see that specific types of nickel are very much in demand due to battery applications and will head into deficit. These products have premiums, and the broader market will begin to consider the ramifications.

Nickel will be in increasingly high demand due to the electric vehicle battery market. He feels a huge premium will open up over the high-quality nickel market while the lower end pig-iron nickel market won’t change as much.

Copper is a very liquid market however a significant amount will be required in electric vehicles. It will take awhile for this demand to ramp up but it’s coming. Another question one needs to ask is what happens to the electric grid once electric vehicles become commonplace. It seems likely that much of the power network will require upgrades and that will likewise require additional copper. Copper has an exciting few years ahead.

The iPath Bloomberg Copper Subindex Total Return Sub-Index ETN (JJC) was unchanged in premarket trading Monday. Year-to-date, JJC has gained 23.01%, versus a 16.36% rise in the benchmark S&P 500 index during the same period.

JJC currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #27 of 129 ETFs in the Commodity ETFs category.


This article is brought to you courtesy of Palisade Research.


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