00:00We do now want to stay in that space here with commodities really on fire.
00:04A bit of a pullback today in gold and silver.
00:06Copper still pushing toward record highs.
00:08And a lot of questions as to, well, just how far this rally that we've been seeing in metals can go.
00:13Who better to talk to than Tim Natamnors, managing director and senior equity analyst over at Wells Fargo.
00:19Tim, great to see you. It's been too long.
00:21Thanks for having me.
00:22What is going on with metals?
00:24And by that, I mean, what is actually driving this?
00:26There's been a lot of speculation as to whether this is part of some broader debasement trade.
00:30Whether this is just maybe a bet on economic conditions.
00:33I mean, what do you think is sort of the fundamental reason why we're seeing so much interest in this?
00:37So I think you hit the nail on the head.
00:39There's fundamental reasons and then there's other reasons that have to do with the macroeconomic sentiment and other factors.
00:46From our vantage point, this is kind of an unprecedented environment of a shortfall on copper that's been long anticipated.
00:52But was brought forward by several high profile interruptions.
00:56So the copper market is actually in shortage conditions.
00:59Anywhere from estimates of 300,000 tons to 800,000 tons this year of a, say, 26 million ton market.
01:06So it gets tricky to forecast exactly where copper can go because there is no one who can make up that copper supply.
01:13Right.
01:13So you have to see substitution.
01:14You have to see alternatives.
01:16Aluminum, similarly, is seeing an unusual shortage in supply and generally strong demand as well.
01:22Talk about the interplay, though, between that mining and specifically talking about the mining side of it with copper relative to precious metals.
01:30There's been some discussion here that at least for those companies that are doing both,
01:33that there might be more incentive to put a little bit more attention on to into precious metals at the expense of copper.
01:38Is there any sort of credence to that?
01:40Look, I think when you're talking about gold and to some extent silver, there is a debasement trade.
01:44There's there's a dollar concern.
01:46There's there's all sorts of factors that are causing a buying of gold that I don't think that can translate necessarily to hoarding of copper.
01:54Right. Copper is going to respond.
01:57There's just a different dynamic for copper demand than there is for gold demand.
02:01And it's not quite the same.
02:03So I think there's been a bit of what we've seen in terms of fund flows and ETF appetite for commodities in general.
02:10But I do think there's more risk that if you see a big run up in something like copper, aluminum, even nickel and iron, et cetera, you get replacement.
02:16You get substitution, which you don't necessarily get in gold.
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