Recent weeks have indicated a significant shift is occurring in financial markets today. It appears that this year's economic recovery, aided immensely by government stimulus, may now be in full reversal. Housing starts, and
COPX: Bearish Forces Mount Against Copper As China's Demand Slows
Summary
- Copper and copper miners, such as those in COPX, had stellar performance late last year as COVID caused production to decline while stimulus caused demand to spike.
- Today, these forces seem to be reversing as copper production is expected to rise above pre-COVID levels just as demand declines in China and the U.S.
- Copper may remain depressed for years if China's construction activity enters a long-term decline, as I expect.
- COPX appears poised for a sharp decline as investor sentiment shifts sharply against the "reflation trade."
Harrison is a financial analyst who has been writing on Seeking Alpha since 2018 and has closely followed the market for over a decade. He has professional experience in the private equity, real estate, and economic research industry. Harrison also has an academic background in financial econometrics, economic forecasting, and global monetary economics.
Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Short position through short-selling of the stock, or purchase of put options or similar derivatives in COPX over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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