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Hello and welcome to Copper Weekly, a Benchmark podcast.
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I'm Michael Finch, Head of Strategic Initiatives, and with me we have Albert Mackenzie, Copper Analyst and Market Reporter, where each week we'll unpack what really moved the copper market and what to watch in the coming days ahead.
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Along the way, we'll be joined by a number of guest speakers.
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So kick back, relax, and enjoy this quick download on Everything Copper.
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Welcome back to Copper Weekly Adventure Park Podcast, episode number 10.
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Thanks as always for tuning in last week.
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We hope you enjoyed a special edition with guest speaker Scott Crooks if you managed to catch us.
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If you haven't already, worth going back and tuning into that one.
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We've got Albert joining us again.
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Albert, how are you doing?
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I am doing very well.
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Thank you.
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Good stuff.
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I understand I was reading your briefing uh this morning, another great edition.
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Um, but it's been you know a fairly interesting week, I'd say, in the copper market.
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Copper's had a fairly strong week when it comes to pricing, I think pushing close to$14,000 per ton.
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Um we've seen some various different stock plays, some some uh declining inventories draining out the system globally.
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Um but I'll say the big thing, perhaps running through everything right now, is that falling inventory piece and also record US imports.
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So um and maybe a slight shift in European sourcing.
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So lots to get into, uh Al, but I want to stay very much with the the pricing element to start with, if we may.
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Um as I said, we're up about 1.3 week on week.
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It's not huge moves, but we're getting close to that$14,000 per ton level.
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Um, and I think uh you might correct me, but uh the highest level since early June.
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So just wanted to get your take on this, Albert.
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In your opinion, you know, what is driving that strength right now?
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Are we seeing any structural changes to this, or is it just another sort of small sentiment play?
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I would actually say this morning.
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So when I wrote the briefing, uh the copper price was getting close to 14,000.
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It is now crossed that level, actually.
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Okay, there you go.
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Um and as of recording, we're we're really quite close to an all-time high.
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Uh, not you know, not quite there yet.
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Um, though obviously it's close enough that as we're speaking, if it if it does cross this, but if it does cross the all-time high threshold by the time you're listening to this, um sorry for being a little bit behind.
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Um but the market is really yeah moving quite quite a lot.
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Um I think there are a few things.
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I mean, there are certain things that don't necessarily have a real material impact on the market, like there's been some disruptions in in Chile in the last few weeks because of the weather, and that actually seems to have changed sentiment a little bit, um, despite not really having a material impact on the market.
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Um, but to me, yeah, the big thing is is these stock drawdowns we're seeing.
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Um, and certainly outside of the US, the the move is very much lower and lower stocks.
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Uh the Shiffy's seeing drawdowns, the LME is seeing drawdowns, um social inventories in in China are seeing drawdowns.
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So we're basically seeing material everywhere uh outside the US falling.
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Um would you say a tight market?
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Is that fair to say?
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That's the thing that's quite hard to say.
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I w it sort of depends on how you want to define these things.
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Um because it in a in a way the market's not particularly tight.
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You know, we're seeing huge amounts of material go to the US, firstly.
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Um so as a global market, there is material around.
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Um, our understanding from both news reports and and conversations with with contacts is that at least 200,000 tons of material is heading into the US for July.
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Um now those numbers won't be out for a little while, like the official ones.
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Um but a number of companies, including Kepler, who I had a conversation with, um, have highlighted that there is a huge amount of material heading to the US.
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Um and they don't track you know lots of things going over borders, uh over land borders, or things going through containerized freight, stuff like that.
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Um and even without all that, you're looking at 200,000 tons for July.
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Um so it's likely to be record-breaking amounts of copper going into the US for one month in July.
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Um, and obviously that makes the rest of the world feel very tight.
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And that's probably a really big part of why these stocks are being drawn down.
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It's it's a huge number, and you put some context there at the end, record breaking.
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Um do you have any other sort of pieces of context you could give our listeners in terms of you know just how large is that 200 KT for the month of July?
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Because it's massive, right?
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Yeah, I mean, if we look it it's one of those things that has been such high uh flows to the US for so long now, it's kind of hard to contextualize it because it's sort of you know, there has been some months where it's been like 100,000, and it it that doesn't look super high compared to the months around it, but that would be pretty high normally.
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Um I guess normally you expect somewhere around 700 KT a year of imports into the US.
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Obviously, it it fluctuates a little bit, um, but 200 KT a month is is already crazy.
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You know, 150 KT a month is already pretty high for US copper imports.
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Um so the idea of it reaching you know close to a quarter of a million tons is really significant.
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Um more than most nations import in a year.
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Uh you know, even some fairly large consumers don't import that much copper every year.
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Got you.
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Is this is this people this is an arbitrage play.
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This is people gearing up and you know baking in some assumptions around potential impending tariffs.
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Is that fair to say, or you know, what's what's driving this?
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Yeah, it's it's it's realistically it's uh it's um an arbitrage play.
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Um the the LME CME arbitrage is uh is still in the CME's favour quite a lot, but it has been for quite a while now.
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It flipped um into the LME's favour and it's flipped back.
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Um so since about mid-May there's been you know financial incentive to bring copper into the US um because of that arbitrage.
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There might have also been, you know, there was an expectation that we might see um an announcement on tariffs around early July.
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Uh that didn't come out, you know, we didn't have that update.
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Um, but there might have been people trying to sneak some copper in before that update in case it did include a tariff.
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Um so there's a number of reasons why people are bringing in material, but it they are all related to the tariff and the arbitrage.
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I think the other thing that has kept copper imports into the US relatively high is that people had a chance to prepare this year.
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So last year there was lots of big flows to the US.
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Um those were done sort of ad hoc on a spot basis, really.
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People were trying to get extra material and move it to the US.
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But this year, you know, in the annual negotiations that happened in November, people could prepare for, you know, material moving to America and were, you know, lots of traders we understand were buying copper.
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So there's like a a there's been a trickle all year.
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And then when the arbitrage boosted, that's like adding on top of that.
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So just uh just for a bit of context, the US has now seen more copper cathode imports uh than 2022 in the entire year, and about the same as 2023.
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Um, there were some quite elevated imports last year and the year before.
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So, you know, it's hard to compare it in that way, but you know, it's very high.
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It does, it does help.
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And again, we're talking huge numbers here.
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So, what is the knock-on for the rest of the world then?
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If the US is literally acting as a sponge, it's it's soaking up, it's taking in um available cathodes.
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What's going on with let's say Europe?
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You know, are we seeing a big shift or evolution in uh import origins in Europe?
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I presume we are.
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Yes.
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So basically that most of the stuff that's going to the US will be CME deliverable, so um deliverable onto the exchange in the US.
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Uh, and that's meant that the US is sucking up a lot of Chilean origin cathode.
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Traditionally, Europe has imported a fair amount of Chilean origin cathode.
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Um but that material is well sought after in the US because it's CME deliverable.
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Um so it's quite pricey, and actually, we saw Cadelco offer record-breaking premiums in Europe for 2026.
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Um, and we've seen a massive increase in demand for DRC and Chinese origin cathode.
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Now, Chinese origin cathode still, you know, not a massive part of the European market, um, but well up on previous years.
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I was actually looking at looking at the data, and Europe has imported this year uh about as much as the last 20 years combined of Chinese origin cathode.
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So it's sort of really skyrocketed.
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Um and and there's a lot more DRC coming in as well.
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Lots of that is is not LME registered, so it can be quite quite a bit cheaper, um, often you know around 40, 50,$100 cheaper, depending on on you know how the market's doing, but you often see SIF uh EQ cathodes well, well below uh the LME market.
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So people are buying that because it's slightly cheaper.
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And obviously the DRC in China have massively increased their production in the last few years, so there's more of it available anyway.
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Okay, so lots of shifting trade flows again as a result or a consequence of this impending potential tariff and people playing the arbitrage um as well.
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Do you want to talk a little bit about we mentioned obviously because of that again that the rest of the world or certainly some uh regions are feeling a pinch in in tight markets, and also on the LME, you mentioned decreasing or declining stocks.
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Do you want to talk a little bit around that in terms of just how significant that is in what are the current levels we're we're looking at right now?
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Yeah, I mean the stocks are pretty low.
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I think that the thing that's i interesting to me, or the most important thing to note, is the trend.
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Um, so in the last month, um LME stocks are down 80 K T Shiffy stocks around 70 KT, and uh just Chinese social inventories around 100 KT, which is quite significant.
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There's also a lot of there's been a really big decrease in on warrant stock on the LME.
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Um so even some of the stuff that hasn't been yet removed has been cancelled.
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Um so that's that's quite significant.
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Uh so LME stocks are currently totally around uh 240 KT down around 80 KT.
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So that's it's quite a big chunk has been removed.
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Um and I think the thing that's interesting is if the arbitrage gets even broader, if uh anything changes in the US situation and a and a tariff is brought in and and maybe that draws in more material depending on how much front loading time people have, um, there might not be a huge amount of material available to sort of to grab up and ship to the US.
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So that's probably the the interesting part of the the the picture.
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Um and it's creating I I call it regional tightness, but it's almost the the opposite.
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It's like global tightness, except for the fact that the US is is really flush with with copper.
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Um but it is making the global market quite tight.
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It does feel like it's uh a US and then a a global ex US market in some regards, yeah.
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Exactly.
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I mean you know, we're talking, we started off talking about record high prices, but last year we saw pretty high surpluses of uh you know on the supply-demand dynamic.
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This year it's a pretty high surplus on the supply-damand demand dynamic.
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Um it's just all heading to the US, which doesn't really need it for actual demand.
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So it's sort of it's a slightly odd picture, and uh, and that could, you know, if you're looking forward, create a lot of volatility on the copper price.
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Exactly.
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Because so much is heading to the US, and that will mean that the US might have you know uh less demand in the future if the tariff situation changes, um, because they have so many stocks.
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Um so it really could change the picture of the market, uh, whether or not the tariff comes in and how that's actioned.
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Yeah, and obviously you mentioned surplus, but it's worth for for the listeners noting that you know it that's not a surplus like we've seen in previous years, where typically, you know, if you have an excess of material in a market, it is it can weigh uh on the price.
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But um, in this instance it was very much stuck in the US.
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I think we've used the term economically locked before, Albert, is that right?
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Yeah.
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Yeah, I think economically locked is a really good way of putting it.
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Some people have sort of said it's not really available for price formation.
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Yeah.
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So it's sort of, you know, it's worth almost considering what the west rest of the world balance looks like, taking out what's going to the US, and then sort of saying, well, what would that sort of deficit look like to the market?
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Because once when when you factor in the amount of material going to the US, the rest of the market is in a deficit, you know, in real terms.
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Very good.
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And they've been exceptionally strong.
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You you've got some stats here for just you could pick two route into an anglo, but do you just want to run us through just how significant you know the earnings are or how strong they are in recent quarters?
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Yeah, so I mean, we tend to look at uh production because that's really useful for supply, but in the last few months we've sort of taken a little bit of an interest in in equities because they've pushed up really significantly.
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Um, you know, multiple in fact, all the companies I was tracking have gone up over 50% in uh in value in the last in the last year.
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Um and Rio Tinto and Anglo-Americans earnings went up 43 and 35% in their latest results.
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Um and it's a huge, you know, it's a huge increase.
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And a lot of that is coming from the fact that the the sort of achieved price for the copper in their books is significantly higher than it was.
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You know, we we're talking about copper hitting a record price today or getting close to it at 14,000.
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The record was, you know, uh more like uh 11,000 only a couple of months ago, and for most of last year, the copper price was around the$10,000 mark, you know, at points lower, at points higher.
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Um so everything over that you know ten thousand dollar mark is just pure profit, really.
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Um in fact everything over sort of seven seven K for most mines is pure profit.
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So if you think of the fact that most of these mines are profitable at far lower copper prices, you then massively increase the copper price, and every other dollar is just profit.
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So it kind of has an oversized impact on the earnings and then obviously on the shares of these of these companies, which can also be used by more retail investors, um, you know, people like you know, everyday people don't want to buy CME or LME copper futures necessarily, and a better way of getting exposure to copper is normally by buying miners or ETFs and stuff like that with exposure to those miners.
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Um, and then the last thing that that's potentially uh pretty interesting is if you look at some of the really diversified miners, um BHP and Rio Tinto are probably the the ones that spring to my mind firstly just because they have such big iron ore books, um copper is playing a much larger part of their profit or of their revenue, let's say.
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Um, you know, getting pretty close to half for BHP and around a quarter for Rio Tinto, and that's you know, it was uh it was under 15% for Rio Tinto um in 2020.
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So, you know, it's it's a real big shift in in how these companies revenue is made and and that focus that would then be put on copper.
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Yeah, I think it's a probably a broader shift in in strategy for for many miners, the uh a desire to have increasing exposure to copper.
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And I think you know, it's not necessarily that that shift in in revenue mix isn't just reflective of the copper price, it's it's uh reflective perhaps as a broader industry play to take on or have more exposure to to copper as a whole.
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One other comment, Albert, you obviously mentioned obviously the earnings are are very high.
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Um in you know when we look at on the on the cost perspective, yes, sure, costs have increased, there has been cost inflation, but again, that that copper price is far outstripping any growth that we've seen with regards to to increasing costs you know, margins are are incredible right now in many, many on the cost curve.
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In fact, mostly all, virtually all are making very healthy margins indeed.
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So it's a good time to be incredible.
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I think also, you know, I mean, there's also definitely a part of copper's I'm trying to think of a word.
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It's it's cool right now, it's the thing that people want to talk about.
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You know, it's related to AI, it's related to the energy transition, it's related to defense, it's related to so much of these things.
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So you you do see, you know, you saw it at Tech Anglo's um merger proposals, is there was a real big focus on copper, you know, and the both of those companies have lots of other things that they mine.
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Um, but there's a real focus on copper, you know, it's seen as this thing for the future and this important thing.
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So not only is that something that investors want and therefore, you know, look at those mining companies that have exposure to it, but it's also something that those mining companies therefore want to get themselves because they know people are interested in it.
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So um I think it's you know an increasingly important part of the mining industry and an increasingly important part of of how these things are priced and and and stuff like that.
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I'm gonna do it, Albert.
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I'm gonna say the word sexy.
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Copper is sexy.
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Yeah, I was gonna say that, but I still stopped my spectrum.
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I I'll take the uh the blame for that one.
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Uh, I think on on on that uh that that bombshell, um, that draws us to a close, Albert.
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So I think a really good discussion, um, very enjoyable once more.
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So thanks for for everything that you've uh provided this week.
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I do want to acknowledge as well, we've had some questions come in uh and some comments on the podcast.
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We're gonna get around to addressing those next week.
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And a reminder to anyone listening if you have a question about the market, anything specific, anything broad, you want some clarification on something we or Albert have talked about, drop a note, drop a comment, a question, and we'll pick it up and we'll start to uh address those as we move forward.
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So thanks once again, Albert.
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We'll see you next week.
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Um but for now, that's all for Benchmarks Copper Weekly.
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Thanks for listening.
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If you found the show useful, follow us on Spotify so you don't miss next week's episode.
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For deeper analysis and data on copper supply, demand and prices, visit benchmarkminerals.com forward slash copper.
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Thanks for listening and join us next week as we break down the latest moves in the copper market.
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Bye for now.
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Hello and welcome to Copper Weekly, a Benchmark podcast.
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I'm Michael Finch, Head of Strategic Initiatives, and with me we have Albert Mackenzie, Copper Analyst and Market Reporter, where each week we'll unpack what really moved the copper market and what to watch in the coming days ahead.
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Along the way, we'll be joined by a number of guest speakers.
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So kick back, relax, and enjoy this quick download on Everything Copper.
00:00:23.920 --> 00:00:27.280
Welcome back to Copper Weekly Adventure Park Podcast, episode number 10.
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Thanks as always for tuning in last week.
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We hope you enjoyed a special edition with guest speaker Scott Crooks if you managed to catch us.
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If you haven't already, worth going back and tuning into that one.
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We've got Albert joining us again.
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Albert, how are you doing?
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I am doing very well.
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Thank you.
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Good stuff.
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I understand I was reading your briefing uh this morning, another great edition.
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Um, but it's been you know a fairly interesting week, I'd say, in the copper market.
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Copper's had a fairly strong week when it comes to pricing, I think pushing close to$14,000 per ton.
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Um we've seen some various different stock plays, some some uh declining inventories draining out the system globally.
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Um but I'll say the big thing, perhaps running through everything right now, is that falling inventory piece and also record US imports.
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So um and maybe a slight shift in European sourcing.
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So lots to get into, uh Al, but I want to stay very much with the the pricing element to start with, if we may.
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Um as I said, we're up about 1.3 week on week.
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It's not huge moves, but we're getting close to that$14,000 per ton level.
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Um, and I think uh you might correct me, but uh the highest level since early June.
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So just wanted to get your take on this, Albert.
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In your opinion, you know, what is driving that strength right now?
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Are we seeing any structural changes to this, or is it just another sort of small sentiment play?
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I would actually say this morning.
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So when I wrote the briefing, uh the copper price was getting close to 14,000.
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It is now crossed that level, actually.
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Okay, there you go.
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Um and as of recording, we're we're really quite close to an all-time high.
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Uh, not you know, not quite there yet.
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Um, though obviously it's close enough that as we're speaking, if it if it does cross this, but if it does cross the all-time high threshold by the time you're listening to this, um sorry for being a little bit behind.
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Um but the market is really yeah moving quite quite a lot.
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Um I think there are a few things.
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I mean, there are certain things that don't necessarily have a real material impact on the market, like there's been some disruptions in in Chile in the last few weeks because of the weather, and that actually seems to have changed sentiment a little bit, um, despite not really having a material impact on the market.
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Um, but to me, yeah, the big thing is is these stock drawdowns we're seeing.
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Um, and certainly outside of the US, the the move is very much lower and lower stocks.
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Uh the Shiffy's seeing drawdowns, the LME is seeing drawdowns, um social inventories in in China are seeing drawdowns.
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So we're basically seeing material everywhere uh outside the US falling.
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Um would you say a tight market?
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Is that fair to say?
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That's the thing that's quite hard to say.
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I w it sort of depends on how you want to define these things.
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Um because it in a in a way the market's not particularly tight.
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You know, we're seeing huge amounts of material go to the US, firstly.
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Um so as a global market, there is material around.
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Um, our understanding from both news reports and and conversations with with contacts is that at least 200,000 tons of material is heading into the US for July.
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Um now those numbers won't be out for a little while, like the official ones.
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Um but a number of companies, including Kepler, who I had a conversation with, um, have highlighted that there is a huge amount of material heading to the US.
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Um and they don't track you know lots of things going over borders, uh over land borders, or things going through containerized freight, stuff like that.
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Um and even without all that, you're looking at 200,000 tons for July.
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Um so it's likely to be record-breaking amounts of copper going into the US for one month in July.
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Um, and obviously that makes the rest of the world feel very tight.
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And that's probably a really big part of why these stocks are being drawn down.
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It's it's a huge number, and you put some context there at the end, record breaking.
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Um do you have any other sort of pieces of context you could give our listeners in terms of you know just how large is that 200 KT for the month of July?
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Because it's massive, right?
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Yeah, I mean, if we look it it's one of those things that has been such high uh flows to the US for so long now, it's kind of hard to contextualize it because it's sort of you know, there has been some months where it's been like 100,000, and it it that doesn't look super high compared to the months around it, but that would be pretty high normally.
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Um I guess normally you expect somewhere around 700 KT a year of imports into the US.
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Obviously, it it fluctuates a little bit, um, but 200 KT a month is is already crazy.
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You know, 150 KT a month is already pretty high for US copper imports.
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Um so the idea of it reaching you know close to a quarter of a million tons is really significant.
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Um more than most nations import in a year.
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Uh you know, even some fairly large consumers don't import that much copper every year.
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Got you.
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Is this is this people this is an arbitrage play.
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This is people gearing up and you know baking in some assumptions around potential impending tariffs.
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Is that fair to say, or you know, what's what's driving this?
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Yeah, it's it's it's realistically it's uh it's um an arbitrage play.
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Um the the LME CME arbitrage is uh is still in the CME's favour quite a lot, but it has been for quite a while now.
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It flipped um into the LME's favour and it's flipped back.
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Um so since about mid-May there's been you know financial incentive to bring copper into the US um because of that arbitrage.
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There might have also been, you know, there was an expectation that we might see um an announcement on tariffs around early July.
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Uh that didn't come out, you know, we didn't have that update.
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Um, but there might have been people trying to sneak some copper in before that update in case it did include a tariff.
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Um so there's a number of reasons why people are bringing in material, but it they are all related to the tariff and the arbitrage.
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I think the other thing that has kept copper imports into the US relatively high is that people had a chance to prepare this year.
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So last year there was lots of big flows to the US.
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Um those were done sort of ad hoc on a spot basis, really.
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People were trying to get extra material and move it to the US.
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But this year, you know, in the annual negotiations that happened in November, people could prepare for, you know, material moving to America and were, you know, lots of traders we understand were buying copper.
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So there's like a a there's been a trickle all year.
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And then when the arbitrage boosted, that's like adding on top of that.
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So just uh just for a bit of context, the US has now seen more copper cathode imports uh than 2022 in the entire year, and about the same as 2023.
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Um, there were some quite elevated imports last year and the year before.
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So, you know, it's hard to compare it in that way, but you know, it's very high.
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It does, it does help.
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And again, we're talking huge numbers here.
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So, what is the knock-on for the rest of the world then?
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If the US is literally acting as a sponge, it's it's soaking up, it's taking in um available cathodes.
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What's going on with let's say Europe?
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You know, are we seeing a big shift or evolution in uh import origins in Europe?
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I presume we are.
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Yes.
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So basically that most of the stuff that's going to the US will be CME deliverable, so um deliverable onto the exchange in the US.
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Uh, and that's meant that the US is sucking up a lot of Chilean origin cathode.
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Traditionally, Europe has imported a fair amount of Chilean origin cathode.
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Um but that material is well sought after in the US because it's CME deliverable.
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Um so it's quite pricey, and actually, we saw Cadelco offer record-breaking premiums in Europe for 2026.
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Um, and we've seen a massive increase in demand for DRC and Chinese origin cathode.
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Now, Chinese origin cathode still, you know, not a massive part of the European market, um, but well up on previous years.
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I was actually looking at looking at the data, and Europe has imported this year uh about as much as the last 20 years combined of Chinese origin cathode.
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So it's sort of really skyrocketed.
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Um and and there's a lot more DRC coming in as well.
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Lots of that is is not LME registered, so it can be quite quite a bit cheaper, um, often you know around 40, 50,$100 cheaper, depending on on you know how the market's doing, but you often see SIF uh EQ cathodes well, well below uh the LME market.
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So people are buying that because it's slightly cheaper.
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And obviously the DRC in China have massively increased their production in the last few years, so there's more of it available anyway.
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Okay, so lots of shifting trade flows again as a result or a consequence of this impending potential tariff and people playing the arbitrage um as well.
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Do you want to talk a little bit about we mentioned obviously because of that again that the rest of the world or certainly some uh regions are feeling a pinch in in tight markets, and also on the LME, you mentioned decreasing or declining stocks.
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Do you want to talk a little bit around that in terms of just how significant that is in what are the current levels we're we're looking at right now?
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Yeah, I mean the stocks are pretty low.
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I think that the thing that's i interesting to me, or the most important thing to note, is the trend.
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Um, so in the last month, um LME stocks are down 80 K T Shiffy stocks around 70 KT, and uh just Chinese social inventories around 100 KT, which is quite significant.
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There's also a lot of there's been a really big decrease in on warrant stock on the LME.
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Um so even some of the stuff that hasn't been yet removed has been cancelled.
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Um so that's that's quite significant.
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Uh so LME stocks are currently totally around uh 240 KT down around 80 KT.
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So that's it's quite a big chunk has been removed.
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Um and I think the thing that's interesting is if the arbitrage gets even broader, if uh anything changes in the US situation and a and a tariff is brought in and and maybe that draws in more material depending on how much front loading time people have, um, there might not be a huge amount of material available to sort of to grab up and ship to the US.
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So that's probably the the interesting part of the the the picture.
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Um and it's creating I I call it regional tightness, but it's almost the the opposite.
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It's like global tightness, except for the fact that the US is is really flush with with copper.
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Um but it is making the global market quite tight.
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It does feel like it's uh a US and then a a global ex US market in some regards, yeah.
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Exactly.
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I mean you know, we're talking, we started off talking about record high prices, but last year we saw pretty high surpluses of uh you know on the supply-demand dynamic.
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This year it's a pretty high surplus on the supply-damand demand dynamic.
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Um it's just all heading to the US, which doesn't really need it for actual demand.
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So it's sort of it's a slightly odd picture, and uh, and that could, you know, if you're looking forward, create a lot of volatility on the copper price.
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Exactly.
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Because so much is heading to the US, and that will mean that the US might have you know uh less demand in the future if the tariff situation changes, um, because they have so many stocks.
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Um so it really could change the picture of the market, uh, whether or not the tariff comes in and how that's actioned.
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Yeah, and obviously you mentioned surplus, but it's worth for for the listeners noting that you know it that's not a surplus like we've seen in previous years, where typically, you know, if you have an excess of material in a market, it is it can weigh uh on the price.
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But um, in this instance it was very much stuck in the US.
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I think we've used the term economically locked before, Albert, is that right?
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Yeah.
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Yeah, I think economically locked is a really good way of putting it.
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Some people have sort of said it's not really available for price formation.
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Yeah.
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So it's sort of, you know, it's worth almost considering what the west rest of the world balance looks like, taking out what's going to the US, and then sort of saying, well, what would that sort of deficit look like to the market?
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Because once when when you factor in the amount of material going to the US, the rest of the market is in a deficit, you know, in real terms.
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Very good.
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And they've been exceptionally strong.
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You you've got some stats here for just you could pick two route into an anglo, but do you just want to run us through just how significant you know the earnings are or how strong they are in recent quarters?
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Yeah, so I mean, we tend to look at uh production because that's really useful for supply, but in the last few months we've sort of taken a little bit of an interest in in equities because they've pushed up really significantly.
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Um, you know, multiple in fact, all the companies I was tracking have gone up over 50% in uh in value in the last in the last year.
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Um and Rio Tinto and Anglo-Americans earnings went up 43 and 35% in their latest results.
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Um and it's a huge, you know, it's a huge increase.
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And a lot of that is coming from the fact that the the sort of achieved price for the copper in their books is significantly higher than it was.
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You know, we we're talking about copper hitting a record price today or getting close to it at 14,000.
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The record was, you know, uh more like uh 11,000 only a couple of months ago, and for most of last year, the copper price was around the$10,000 mark, you know, at points lower, at points higher.
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Um so everything over that you know ten thousand dollar mark is just pure profit, really.
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Um in fact everything over sort of seven seven K for most mines is pure profit.
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So if you think of the fact that most of these mines are profitable at far lower copper prices, you then massively increase the copper price, and every other dollar is just profit.
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So it kind of has an oversized impact on the earnings and then obviously on the shares of these of these companies, which can also be used by more retail investors, um, you know, people like you know, everyday people don't want to buy CME or LME copper futures necessarily, and a better way of getting exposure to copper is normally by buying miners or ETFs and stuff like that with exposure to those miners.
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Um, and then the last thing that that's potentially uh pretty interesting is if you look at some of the really diversified miners, um BHP and Rio Tinto are probably the the ones that spring to my mind firstly just because they have such big iron ore books, um copper is playing a much larger part of their profit or of their revenue, let's say.
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Um, you know, getting pretty close to half for BHP and around a quarter for Rio Tinto, and that's you know, it was uh it was under 15% for Rio Tinto um in 2020.
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So, you know, it's it's a real big shift in in how these companies revenue is made and and that focus that would then be put on copper.
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Yeah, I think it's a probably a broader shift in in strategy for for many miners, the uh a desire to have increasing exposure to copper.
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And I think you know, it's not necessarily that that shift in in revenue mix isn't just reflective of the copper price, it's it's uh reflective perhaps as a broader industry play to take on or have more exposure to to copper as a whole.
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One other comment, Albert, you obviously mentioned obviously the earnings are are very high.
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Um in you know when we look at on the on the cost perspective, yes, sure, costs have increased, there has been cost inflation, but again, that that copper price is far outstripping any growth that we've seen with regards to to increasing costs you know, margins are are incredible right now in many, many on the cost curve.
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In fact, mostly all, virtually all are making very healthy margins indeed.
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So it's a good time to be incredible.
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I think also, you know, I mean, there's also definitely a part of copper's I'm trying to think of a word.
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It's it's cool right now, it's the thing that people want to talk about.
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You know, it's related to AI, it's related to the energy transition, it's related to defense, it's related to so much of these things.
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So you you do see, you know, you saw it at Tech Anglo's um merger proposals, is there was a real big focus on copper, you know, and the both of those companies have lots of other things that they mine.
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Um, but there's a real focus on copper, you know, it's seen as this thing for the future and this important thing.
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So not only is that something that investors want and therefore, you know, look at those mining companies that have exposure to it, but it's also something that those mining companies therefore want to get themselves because they know people are interested in it.
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So um I think it's you know an increasingly important part of the mining industry and an increasingly important part of of how these things are priced and and and stuff like that.
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I'm gonna do it, Albert.
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I'm gonna say the word sexy.
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Copper is sexy.
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Yeah, I was gonna say that, but I still stopped my spectrum.
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I I'll take the uh the blame for that one.
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Uh, I think on on on that uh that that bombshell, um, that draws us to a close, Albert.
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So I think a really good discussion, um, very enjoyable once more.
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So thanks for for everything that you've uh provided this week.
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I do want to acknowledge as well, we've had some questions come in uh and some comments on the podcast.
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We're gonna get around to addressing those next week.
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And a reminder to anyone listening if you have a question about the market, anything specific, anything broad, you want some clarification on something we or Albert have talked about, drop a note, drop a comment, a question, and we'll pick it up and we'll start to uh address those as we move forward.
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So thanks once again, Albert.
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We'll see you next week.
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Um but for now, that's all for Benchmarks Copper Weekly.
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Thanks for listening.
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If you found the show useful, follow us on Spotify so you don't miss next week's episode.
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For deeper analysis and data on copper supply, demand and prices, visit benchmarkminerals.com forward slash copper.
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Thanks for listening and join us next week as we break down the latest moves in the copper market.
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Bye for now.
