In today’s briefing:
- Copper All Set To Break 10k USD/Ton In The Short-Term
- Seasonal Weakness Ahead?
- Iron Ore At 105 USD/Ton: Sweet Spot for Fenix Resources (FEX AU)
- Waller’s Gambit
Copper All Set To Break 10k USD/Ton In The Short-Term
- This is a follow-up on our piece 10 days ago Rate Cut To Spur Copper Performance In The Short-Term to Over 10K USD/Ton.
- Copper, trading above USD 9,800/ton, appears poised to breach USD 10,000/ton; prospective rate cuts and supply deficits support upside, partially offset by elevated exchange inventories.
- Southern Copper (SCCO US) and Antofagasta PLC (ANTO LN) are our favorite names. The restart of the Cobre Panama mine (although low probability) could boost First Quantum Minerals (FM CN).
Seasonal Weakness Ahead?
- We are seeing fundamental headwinds in the form of elevated valuations and earnings uncertainty from tariffs, which won’t be visible until Q3 earnings season.
- On the other hand, the technical outlook appears relatively benign.
- Our base case calls for some choppiness ahead. We are near-term cautious, but not bearish.
Iron Ore At 105 USD/Ton: Sweet Spot for Fenix Resources (FEX AU)
- We are now set for a decline in the benchmark grade from 62% to 61% effective January 2nd, 2026, for Platts, aligning the benchmark with more commonly traded fines.
- Alot of exchanges have begun to adopt this change, and we will update our FY26 numbers for it as well. Iron ore remains elevated at 105 USD/ton, climbing 2.3% WoW.
- We continue to advocate strongly for Fenix Resources (FEX AU). Read Fenix Resources (FEX AU): Exciting Value-Adding Catalyst Can Triple Production Again for a detailed outline of our thesis.
Waller’s Gambit
- Fed Governor Chris Waller is a leading candidate to be the next Fed Chair, and the issue of Fed independence is paramount.
- Our evaluation of his economic case for rate cuts should be whether the decisions are based on sound data, theory and solid judgment.
- He has shown solid thinking on employment, but his justification for rate cuts based on the Fed’s inflation mandate is weaker and shows signs of wishful thinking.
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