AI
Sunday, September 03, 2017 10:55:20 PM
Monthly Copper Chart
It's always good to take a look at longer term price charts to get a perspective of where we're at. The monthly copper chart clearly shows the magnitude of the recent breakout. If we view copper as trading in a broad channel, we see that copper essentially spent the last part of 2015 and most of 2016 testing the bottom of the channel. The floor of the channel in my view, establishes the minimum price that copper producers can sustain. As the price touches the floor, a significant percentage of producers shutter projects, cease investing in exploration and development; and a new commodity bust/boom cycle commences. I suspect (but haven't proven) that the floor tracks inflation relatively closely.
We may see some corrections along the way, possibly even coming back to test the floor in the 2.20 to 2.30 range. But I am persuaded that we have now entered a bull cycle for copper that will continue for some time to come, possibly even taking out the high back in 2010-2011.
Maybe, just maybe, Excelsior will go into production in 2018 in the midst of the perfect storm for copper. Copper hitting decade highs with a low-cost, domestic producer coming online that has 0.65 production costs and 1.24 all-in costs.
PG
It's always good to take a look at longer term price charts to get a perspective of where we're at. The monthly copper chart clearly shows the magnitude of the recent breakout. If we view copper as trading in a broad channel, we see that copper essentially spent the last part of 2015 and most of 2016 testing the bottom of the channel. The floor of the channel in my view, establishes the minimum price that copper producers can sustain. As the price touches the floor, a significant percentage of producers shutter projects, cease investing in exploration and development; and a new commodity bust/boom cycle commences. I suspect (but haven't proven) that the floor tracks inflation relatively closely.
We may see some corrections along the way, possibly even coming back to test the floor in the 2.20 to 2.30 range. But I am persuaded that we have now entered a bull cycle for copper that will continue for some time to come, possibly even taking out the high back in 2010-2011.
Maybe, just maybe, Excelsior will go into production in 2018 in the midst of the perfect storm for copper. Copper hitting decade highs with a low-cost, domestic producer coming online that has 0.65 production costs and 1.24 all-in costs.
PG
