I think you may be off on oil. The July spike in transports was not even close to pre war levels. The graph should start with pre war levels. China has its own SPR of 1.4B vs 400m barrels. In total, the drop in gulf oil production is reaching SPR limits. The longer oil prices stay higher Iran will stall and keep the strait closed. The longer it is closed, the better hand Iran has to play. Also once Horus is open, it will take years to replenish the 2.4B barrels in the worlds SPR’s and that will be consistent buying which will keep oil elevated.
Nicola Mining in Canada seems to be a good proxy Gold + US/Canada tension. The market values a junior explorer; it is becoming BC’s scarce permitted third-party gold/silver milling hub. H1 custom-milling revenue rose to C$2.59m from C$79k, and contracted Dome Mountain feed can drive fixed-cost absorption and self-funded exploration. Catalyst: Q3/Q4 proof of sustained throughput above 150 tpd. Risk: feed delays or throughput below 100 tpd breaks the cash-flow thesis.
Hormuz is far from over. Iran is contemplating preemptive strikes now (https://www.iranintl.com/en/202609014196). The fanatics are solidly in charge. The US will get barrels through, but they will demand some kind of risk premium for it. And there is all the hassle with ship to ship transfer.
Where you're flat out wrong is the crack spread. Ukraine is currently producing 10 million drones/year, reaching 20 million drones/year some time next year. That means Russia is a product importer now and will continue to be for the foreseeable future.
Either china stops importing crude and therefore doesn't solve the refined products deficit or China does import and it contributes, you cant have both! Refined stays tight until Ukraine stops attacking russian refineries or you actually see refined products moving through the strait. SPR wont do anything for products, just like in March/April. Agreed on crude, dark transit flows are very high.
Great outline - I agree with all except fertilizer but did find your argument persuasive especially the China Urea piece. I definitely think some fertilizer companies will benefit from super El Niño, you can see it in the last El Niño. Great charts on supply!
Its problem is that high prices eventually attack their own demand, especially when China is structurally reducing the marginal barrel it needs to import.
So the cleaner framework is:
scarcity + inelastic supply = bullish
scarcity + demand destruction + substitution = much harder
That’s why “commodities” is the wrong bucket.
The next winners will be the ones where supply cannot respond fast enough and demand cannot easily disappear.
I think you may be off on oil. The July spike in transports was not even close to pre war levels. The graph should start with pre war levels. China has its own SPR of 1.4B vs 400m barrels. In total, the drop in gulf oil production is reaching SPR limits. The longer oil prices stay higher Iran will stall and keep the strait closed. The longer it is closed, the better hand Iran has to play. Also once Horus is open, it will take years to replenish the 2.4B barrels in the worlds SPR’s and that will be consistent buying which will keep oil elevated.
Bullish on uranium and especially copper here. Great post, my friends!!
Thanks a lot Jimmy!
Nicola Mining in Canada seems to be a good proxy Gold + US/Canada tension. The market values a junior explorer; it is becoming BC’s scarce permitted third-party gold/silver milling hub. H1 custom-milling revenue rose to C$2.59m from C$79k, and contracted Dome Mountain feed can drive fixed-cost absorption and self-funded exploration. Catalyst: Q3/Q4 proof of sustained throughput above 150 tpd. Risk: feed delays or throughput below 100 tpd breaks the cash-flow thesis.
I have a quarter of my portfolio in Steppe Gold Ltd. (STGO.TSX).
If you're doing junior miners with exploration/expansion, just look at them. Their numbers are crazy.
Good company, agree!
Agree, great company!
Hormuz is far from over. Iran is contemplating preemptive strikes now (https://www.iranintl.com/en/202609014196). The fanatics are solidly in charge. The US will get barrels through, but they will demand some kind of risk premium for it. And there is all the hassle with ship to ship transfer.
Where you're flat out wrong is the crack spread. Ukraine is currently producing 10 million drones/year, reaching 20 million drones/year some time next year. That means Russia is a product importer now and will continue to be for the foreseeable future.
I think refined products is a better spot to be. We will see.
It is a good place to be.
Good luck.
Either china stops importing crude and therefore doesn't solve the refined products deficit or China does import and it contributes, you cant have both! Refined stays tight until Ukraine stops attacking russian refineries or you actually see refined products moving through the strait. SPR wont do anything for products, just like in March/April. Agreed on crude, dark transit flows are very high.
Did you have a look into tungsten? But v bullish on copper!!
Not really, would tend to say bullish tungsten, but its too niche for us.
True dat, such a small market
Commodity winners usually look late until the shortage is already priced as destiny.
https://paretoinvestor.substack.com/p/time-to-go-nuclear
What about silver?
When copper production rises (and it will really , really have to rise), that produces a lot of silver byproduct.
Personally, I am a lot less bullish on silver than on gold or copper.
Sir, with the Hope to be helpful and start a respectful positive Exchange of different PoVs, I invite you to have a look at this:
The more Grain and especially Corn Prices rise, the more Gold could FALL…
https://alejandroscorpio.substack.com/p/corn-1000bu-ath-and-why-this-is-bearish?utm_source=share&utm_medium=android&r=8mzfdf
Thank you!
your conflating "fertilizers" with "urea". I'd be more specific by saying nitrogen fertilizers or urea.
Fertilizers in general. Wanted to focus more on China and Urea.
Better late than never
We always been bullish.
Great outline - I agree with all except fertilizer but did find your argument persuasive especially the China Urea piece. I definitely think some fertilizer companies will benefit from super El Niño, you can see it in the last El Niño. Great charts on supply!
Thank you!
Demand is forecast to outstrip supply by a wide margin.
The interesting part is the divergence, not the commodity list.
Gold / copper / uranium all benefit from some version of the same structural constraint:
monetary distrust / electrification / power scarcity / slow supply response
Oil is different.
Its problem is that high prices eventually attack their own demand, especially when China is structurally reducing the marginal barrel it needs to import.
So the cleaner framework is:
scarcity + inelastic supply = bullish
scarcity + demand destruction + substitution = much harder
That’s why “commodities” is the wrong bucket.
The next winners will be the ones where supply cannot respond fast enough and demand cannot easily disappear.