Brent vs Copper

A commodities strategy note recommending a short Brent and long Copper trade based on easing US-Iran tensions and strong Chinese industrial demand.

Key Takeaways

• 1.Maintain a short position on Brent crude based on geopolitical de-escalation between the US and Iran and increasing traffic in the Strait of Hormuz.
• 2.Take a long position on Copper, driven by LME inventory pulls, Chinese resource nationalization, and robust demand growth from the power grid and downstream restocking.
• 3.Chinese cathode demand remains robust, with May and June growth expected to stay strong despite sequential moderation from April's +7% y/y.

Table of Contents

• Short Brent
• Long Copper
• Indicative Terms/Pricing Levels
• OTC Derivatives Risk Disclosures
• Pricing and Valuation
• Market Making, Investing and Lending
• Early Termination Payments
• Notice to Australian Investors
• Notice to New Zealand Investors
• Notice to Swiss Investors
• Additional Disclaimers

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