GS McGeoch Materials, Copper ATH

GS James McGeoch - GS Materials August 17.....Copper new ATH at $6.82lb...Koreas "pre emptive" move with GLENCORE.....BUY GSXGCOPP 17 Aug 2026 James McGeoch · Goldman Sachs · Vice President, FICC & Equities Mon 17 Aug 2026, 2:27am ET

I am on the road next few days, wanted to have a quick stab as this will be the topic of week (along with Gold and the 200-day at $4500). As Copper makes a fresh ATH $6.82/lb, the news I see is some new and more of the same — this is a sign of how it’s going. Korea Eximbank to lend $1bn to Glencore for copper supply. The phrase they use is utterly key: “we will be able to secure a stable supply of key materials for Korea’s advanced-industry supply chains,” an Eximbank official said in the statement, describing the move as “preemptive” from an economic-security perspective. China state media making some suggestions of Codelco production curtailments. When I look at the news it’s convoluted and lacks teeth; what we do know is Codelco announced some management changes at Chuquicamata, El Teniente and Ventanas. We also know the new Chair at Codelco is changing things up — “value over volume” — suggested 1.3mt not 1.7mt is the type of number to expect, and a persistent ask of JVs. This word pre- emptive: it’s what China has been doing for the last two decades, and it’s IMO clearly what the US is doing on CMX stockpiles. Anyone who is using those stocks in balances is clearly not seeing the wood through the trees. The White House will not let them be re-exported — keep the tariff threat, keep the incentive. If anything the scrap ban is what you should be watching.

The thing we do know is: Chinese production is down and falling (y/y expected down for a second year running), concentrate is in desperately short supply, evidenced by TC/RC at records (>$200/t discount), scrap availability is down onshore (smelter utilisation <75%), LME stocks persistently drawing, CMX arb will accelerate that in August and September. Last week we lost >50kt of supply (Antofagasta guidance and Gresik smelter issues). Last Friday I wrote the below paragraph; all of it is not new — the market has just been distracted with the rally in gold, the selloff in aluminium and the energy price gyrations of the last 6 weeks in particular.

Equities continue to lag. This is where you should be looking in miners — GSXGCOPP Index — shout on single stocks, plenty of those to discuss now reporting season is pretty much over (BHP tonight; let’s see how the copper book shapes, with Escondida and SA Copper competing for capital against the capital- management ask).

From Friday: Copper still has eyes. It is really reconciling what the biggest driver is. Sure there is the omnipresent threat of tariffs, however I believe this has taken a backseat to the supply-side story. Robert Friedland brought The Copper Residual back to the top of the feed — all those in this channel will nod along; those who are not, I struggle to see how they can ignore. As Jeff Currie used to shout: physical assets vs financial assets. It’s why I am watching TC/RC so closely. Robert previously said reports of − $200 TC; I heard last week from a trader “scarcity pricing” and −$270/t. As the article says, “during times

of abundance markets allocate metal flow; during times of scarcity, governments are the allocator.” Remember what I have been harping on about: demand-driven moves are linear, supply-driven ones are asymmetric. Also I like to remind myself: the market in oil can trade through the barrel; in copper you can only trade the back end. Chinese smelter rates are falling towards 70% (concentrate and scrap availability down). The economic growth plan is heavily copper-dependent (energy transition, ESS, EV, solar, AI, DC, humanoids — all equal power, and copper enables that distribution at scale). If the US keeps pulling these units onshore (by luck or design), China needs to wrestle power, and that is leveraging smelter production, which is all about concentrate. Latest print was ANTO yesterday: the market loses c.35kt at the midpoint. Consensus has mine supply growth around 0% in 2027, despite YTD running more than 200bps below that. It is easy for everyone to say…