Copper — The Security Premium
Disclosure. This is independent research published for information only. It is not investment advice, a personal recommendation, or an offer to buy or sell any security, and it takes no account of your objectives or circumstances. Figures are point-in-time as of August 27, 2026 and are not updated after publication. Forward-looking statements are uncertain and outcomes may differ materially. The author holds no position in the securities discussed and has received no compensation from any issuer named, unless stated otherwise above. Past performance does not indicate future results. Disclosures.
The 2026 annual treatment and refining charge benchmark settled at $0/ton — the lowest on record — and spot TC/RCs went deeply negative by mid-year. Smelters are now competing for concentrate rather than being paid to process it. That inversion is hard to reconcile with a comfortable mine-supply picture, and it is happening while Grasberg, Kamoa-Kakula and Cobre Panamá are all disrupted at once. The consensus already owns the electrification and AI demand stories. What looks underpriced is the security premium: what reliable production, processing and trade access are worth once governments start treating copper supply chains as strategic infrastructure. That argues for dispersion rather than a blanket long — and for a specific pair.
Inside the report
- The four-pillar thesis: supply constraint, electrification, AI/data centers, jurisdictional security
- Long FCX: Grasberg's staged recovery schedule and 410kt/year of El Paso refining headroom
- Short First Quantum: why Panama's two-track legal problem is a duration risk, not a headline
- Ivanhoe as a secondary avoid, a working SOTP, and the comps table across six names
- What breaks the long case, what breaks the short case, and how to size the pair
Read the full report
13 pages, six exhibits, and the full long/short framework. Enter your email to read the report online.
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