Commodity Calls: Week Ending 6 September 2024

Kazakhstan wants to use the uranium they mine, Goldman Sachs cuts bullish copper outlook, and rising adoption of hybrids drive palladium demand.

Join Global X each week for ‘Commodity Calls’ to explore all the recent signals and developments that occurred in the world of commodities.

Looking for more? Check out this week’s Market Moves and Thematic Spotlight.

Uranium

Bullish

• Kazakhstan has announced a national referendum requesting its people to vote on whether a nuclear power plant should be constructed in the country.¹ Despite being the world’s leading producer of uranium, Kazakhstan does not use nuclear energy. The country does, however, have three operating nuclear research facilities.
• Kazatomprom, the world’s largest uranium miner, has cut its output guidance for 2025 citing a shortage of sulfuric acid – a key ingredient in uranium extraction.² The miner cut its production plans by more than 20%, from a range of 30,500-31,500 tonnes down to 25,500-26,500 tonnes.
• The Swiss government is seeking to lift the country’s ban on nuclear power which has been in place since January 1, 2018.³ The country said all clean energy sources are necessary to meet climate targets and electricity demand.

Bearish

• Monitors from the International Atomic Energy Agency show that Iran’s stockpile of highly enriched uranium increased by 16% in the past three months.⁴ Highly enriched uranium is considered similar in nature to weapons grade fissile material, and the country’s continual stockpiling has raised international concern.

Explore uranium with ATOM.

Copper

Bullish

• Codelco is seeking to strengthen its position as the world’s largest copper miner. The firm offered to acquire a 10% stake in Quebrada Blanca, a Chilean copper mine majority owned by Canada’s Teck Resource, for US$500 million.⁵

Bearish

• Goldman Sachs has exited a long-term bullish position on copper and slashed its price forecast citing a weak Chinese recovery and shrinking demand.⁶ The investment bank has been a vocal copper bull over the past 12 months; however, weak economic reports from China suggests there might be a delay in the expected rally.

Explore copper with WIRE.

Palladium

Bullish

• Hybrid vehicles are being adopted at a much faster rate than previously expected, improving palladium demand forecasts.⁷ In July, hybrid vehicles accounted for more than 50% of vehicle sales in China, and in the EU, hybrids grew 24% in YoY sales.^8,9 Hybrids still use fossil fuels in their operations, meaning they require catalytic converters and palladium.

Bearish

• Goldman Sachs, German industrial company BASF, and two other banks have agreed to pay US$20 million to settle an anti-trust lawsuit accusing the firms of conspiring to suppress platinum and palladium prices.¹⁰

Explore palladium with ETPMPD.

^{Forecasts are not guaranteed and undue reliance should not be placed on them. This information is based on views held by Global X as at 10/09/2024. Investing involves risk, including the possible loss of principal. Diversification does not ensure a profit nor guarantee against a loss.}

^{Brokerage commissions will reduce returns.}

^{This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information is not intended to be individual or personalised investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.}