The Glencore rout returns

The Glencore rout is back with the stock down 17.5% in the past week (and 4.2% last night). The resumption of weakness has coincided with falls in the copper price that have been triggered, in part, by a more hawkish outlook for the US dollar. GLEN basically trades as a leveraged copper stock:

My own view remains that the downside for copper is one the greatest still in prospect for base metals. The 100 year price table shows just how high copper remains versus prior cycles:

The table shows the percentage by which today’s metals prices have deviated from real, long term averages. Copper is one of the few that remains inflated even versus the shorter real price trends.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.