Southern Copper Rises with the Commodities Bull Cycle

Copper finally breaking out of this 2 year consolidation range that I noted in my last post. Copper finally broke through that $3.75-$3.80 top it’s been hitting and tapped $3.86. Folks are saying the commodities run, thus copper included I presume, is a bet on the dollar falling further on the next Fed rate cut. Either way, the commodities supply is still tight, we are still in a multi-year commodities bull cycle, and supply should continue to be tight as miners had under invested in developing mines (It takes years to evaluate, design, and begin operations in new mines).

Copper and miners like PCU are some 25% below their all time highs.  Even if Copper just hangs here for a while, the miners have a lot of catchingup to do.  ure, there are operational risks with the miners that you don’t get with the metal itself, but having owned PCU before, the only operational risk I’ve experienced was with the elections 2 yrs ago, and the stock only took a small dip before resuming its uptrend. 

Therefore, I have every reason to jump back into copper miners (& thus weak dollar plays) like PCU and FCX. Gold’s had the run copper hasn’t had, so I’m going with PCU as I noted earlier. After a 2 year breather, copper’s resuming its uptrend.

Disclosure: Author is long PCU and FCX as of this post