Key Takeaways
- Boeing (BA) shares surged 7-8% following the long-awaited FAA certification of the 737 Max 7, marking a major milestone in the company’s recovery.
- Copper prices hit record highs above $14,800 per ton as London Metal Exchange (LME) inventories fell for 42 consecutive days, signaling a severe physical supply squeeze.
- Mexico has applied a compensatory duty of $181 per ton on Chinese ammonium sulfate imports to protect domestic producers, despite pushback from agricultural groups.
- Wall Street sentiment on Boeing (BA) is at its most bullish since 2022, with 21 "Buy" ratings and zero "Sell" recommendations among major analysts.
- LME copper backwardation has widened to over $260, the highest since the 2021 squeeze, as traders scramble for immediate delivery of the metal.
Boeing Secures Critical FAA Milestone
The Federal Aviation Administration (FAA) has officially granted an amended type certificate for the Boeing (BA) 737 Max 7, ending a nearly decade-long review process. This certification allows the company to begin deliveries of the smallest and longest-range variant of the Max family, with Southwest Airlines (LUV) expected to be the launch customer. The approval follows extensive design changes, including a redesigned engine anti-ice system and updates to flight-control software.
Analysts at BNP Paribas and Argus Research recently upgraded the stock, citing a "cash flow inflection" after the company reported $631 million in Q2 free cash flow, beating consensus estimates. Bernstein and Tigress Financial have set ambitious price targets of $298 and $305, respectively. Despite the optimism, the FAA continues to maintain strict oversight, recently ordering inspections for seat installations on roughly 31,000 aircraft.
Copper Markets Face Unprecedented Supply Squeeze
The global copper market is entering a period of extreme tightness, with spot prices on the LME recently trading at a $260 premium over later-dated futures. Total LME inventories have plummeted to 204,975 tons, and nearly 58% of that volume is already earmarked for withdrawal. Analysts warn that if the current depletion rate continues, prices could breach the $15,000 per ton mark in the near term.
Supply disruptions are mounting as Chinese smelters cut production by nearly 3% year-on-year due to a shortage of raw copper concentrate. In the Americas, production outlooks have been lowered in Chile, while traders in the U.S. are aggressively stockpiling metal in anticipation of potential new tariffs on refined copper. Long-term demand from electric vehicles (EVs) and AI data centers is expected to keep the market in a structural deficit through 2026.
Mexico Imposes Duties on Chinese Fertilizers
In a move to safeguard its domestic chemical industry, Mexico has implemented a compensatory duty on ammonium sulfate imports from China. The duty, set at approximately $181 per ton, comes as Mexican agricultural producers face rising costs for alternative fertilizers like urea. While domestic manufacturers argue the measure is necessary to combat anti-dumping, farmers in regions like Sinaloa and Jalisco have petitioned for a temporary removal of the tax to mitigate food inflation.
This trade action coincides with a broader escalation of trade tensions between the two nations. China's Ministry of Commerce (MOFCOM) recently retaliated by imposing provisional anti-dumping duties of up to 54.3% on Mexican pecan imports. The Mexican Secretariat of Economy has expressed concern over these measures, noting that direct pecan exports to China were valued at over $21.9 million in 2024.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.