johnsyn
13 years ago
Copper prices to remain high in 2012
Despite some price retracing in 2011, the copper physical market fundamentals remain strong; with liquid stocks near an all-time low. China’s growth will continue to underpin copper’s performance although it may not be the “market saviour” that it was in 2009. In the longer term, according to Intierra Resource Intelligence, increased mine supply will temporarily overwhelm the market. This will create a dip in the price of copper from 2014 to 2017 followed by a recovery in the last part of the decade. Production costs will become more of a factor in determining the price of copper and these costs are higher than in the past.
Intierra’s Executive Director, Glen Jones, will present Copper: Market Dynamics and the Exploration Pipeline at the PDAC 2012 Conference in Toronto, Canada on Sunday March 4 at 2:15 pm. This talk is part of the Commodities and Market Outlook session.
The PDAC four-day annual Convention held in Toronto, Canada has grown in size, stature and influence since it began in 1932 and today is the event of choice for the world’s mineral industry. In addition to meeting over 1,000 exhibitors and 27,000 attendees from 120 countries, it allows the opportunity to attend technical sessions, short courses, the Prospector’s Tent, the Core Shack as well as social and networking events.
INTERNATIONAL MINING
johnsyn
13 years ago
Copper and oil look good in 2012: Scotiabank
Andrew Topf | December 23, 2011
.A major Canadian bank is predicting better months ahead for copper and oil.
After falling for three consecutive months, Scotiabank’s Commodity Price Index showed a one percent gain in November, boosted by a sharp rebound in oil and firmer base metals prices.
Top 2011 performers in the index, according to Scotiabank, were sulphur, coking coal, potash, and hogs and cattle. Gold came seventh in the index with a 14.6% gain between late 2010 and mid-December of this year.
The bank noted that copper is in a supply deficit situation currently, and is likely to remain so in 2012 even with a 6% increase in world mined copper compared to a meagre 0.4% increase in 2011.
That will continue to put upward pressure on prices, notes Scotiabank commodities market specialist Patricia Mohr, who added that demand in China is likely to pick up soon:
“Much of the recent pickup in refined copper imports into China has reflected stockpiling by property developers for use as collateral for bank credit,” said Mohr. “However, China’s fabrication demand should strengthen again next spring, with prices surging back to US$4. Copper prices could average just under the US$4 mark through much of 2013.”
Mohr is also bullish on oil, pointing to rising prices for Brent crude, which was hovering around $107 a barrel on Thursday:
“One of my top picks is oil because, despite a lot of uncertainty in the global economy, weak performance in the Euro zone and slow growth in United States, oil prices have remained strong,” she told The Halifax Chronicle-Herald.
Zinc prices are also expected to pick up in 2012 and come on strong mid-decade due to dwindling supply, the newspaper reported.
MINING.COM
johnsyn
13 years ago
Copper set for worst performance since 2008 as China says ‘global recession is certain’
Frik Els | November 21, 2011 MINING.COM
.Reuters reports copper hit its lowest in nearly a month on Monday as investors, already mired in worries over Europe’s debt, digested news that US plans to combat debt are in disarray and took in warnings from China about gloomy global growth prospects.
While US politicians’ inability to reach consensus on tackling the country’s debt problems was greeted with little surprise and the Europe crisis has been foremost in investors’ minds for months, the statements by China’s Vice Premier overnight really knocked sentiment. Wang Qishan said that a long-term global recession is certain to happen and China must focus on domestic problems. China is the world’s top copper consumer, taking in about 40% of the world’s copper versus Europe that accounts for 19% of demand.
In early morning trade Monday in New York December copper declined 2.9% to $3.30 a pound. Copper has declined 22% to $7,525 a metric ton on the London Metal Exchange this year, heading for the first annual drop since 2008.
Reuters reports with so little to cheer on the macro side, investors took some comfort from data showing copper stocks, seen to signal demand strength, continued their relentless slide in LME warehouses.
On Friday Bloomberg reported 11 of 23 copper traders surveyed expect the metal to decline, the second consecutive week that their outlook worsened and the highest proportion since Sept. 23. The last time so many were bearish, prices dropped 4.6% the following week.
johnsyn
13 years ago
It’s worse than you think: Dr. Copper is Dead
Frik Els | November 23, 2011 MINING.COM
Reuters reports copper hit a one-month low on Wednesday, pressured by worries about the outlook for demand after factory growth in top consumer China slowed in November, a poor bond sale in Germany intensified concerns about the euro zone debt crisis and US efforts to tackle its budget flounders.
Three-month contracts for the red metal fell to a one-month low at $7,168 a tonne in intra-day trade in London and extended its losses in New York where it was trading at $3.27 a pound by early afternoon, its lowest level since October 25 and down 30% from its 2011 high of $4.61 set in February.
Copper used in the power, telecoms and construction sectors is often seen as a barometer for economic growth, but a new research report suggests “Dr. Copper is Dead” and that the red metal, along with oil, have actually been lagging other economic indicators.
In short: things may well be even worse than the fall in the copper price suggests. BusinessInsider quotes the research note from investment bank SocGen:
“Doctor Copper is dead because copper prices will, in our view, not be leading the ongoing slowdown of the global economy. Investors who use the copper price as a leading indicator for the current business cycle downturn are likely to be disappointed as copper is likely to lag other leading indicators. The reason for this is simple: the physical copper market is tight and has tightened further over recent months. The same is true for oil. The physical crude oil market is extremely tight at present, which explains why crude oil prices have been very resilient despite the terrible newsflow coming out of Europe and fears of a global recession.”
johnsyn
13 years ago
Record $8.5 billion likely spent in 2011 exploring for gold
Frik Els | September 18, 2011
.Research firm Metals Economics Group reports gold continues to be top exploration target accounting for more than 50% of global exploration of non-ferrous metals for the second consecutive year in 2011. Latin America is set continue to be the industry’s favorite regional exploration destination in 2011, while Canada will remain the top overall country.
Copper will account for roughly a fifth of 2011 nonferrous exploration budgets that is expected to exceed US$17 billion for expenditures related to precious and base metals, diamonds, uranium, and some industrial minerals. It represents an increase of about 50% from the 2010 total and a new all time high.
Budgets for grassroots, late-stage, and mine site exploration have all increased significantly, but the relative proportions allocated to each stage of development are expected to remain relatively stable compared with 2010. Despite a sharp rise in the amount of money planned for grassroots work in 2011, the proportion of the overall industry exploration effort committed to long-term project generation is anticipated to remain near historically low levels—about a third of 2011’s exploration total compared with an average of about half the annual exploration totals through the 1990s.
MEG’s analysis is based on information collected from more than 3,500 companies worldwide, of which about 2,400 are expected to have active exploration programs and will therefore be included in the final study
Last year the 21st edition of Corporate Exploration Strategies (CES) reported a 2010 exploration budget total of $11.2 billion. The industry restored almost two thirds of the $5.5 billion that was cut from exploration in 2009 in response to the global financial crisis. The speed and the strength of the 2010 rebound were a welcome surprise to many, given the severity of the downturn and widespread forecasts of a deep and protracted recession.
Regionally, Latin America (led by Mexico, Peru, Chile, Brazil, and Argentina) was the top exploration destination in 2010—a position it has held for the better part of two decades—while Canada was the top country overall. Gold was the leading target, attracting more than half the global exploration budget total, with copper a distant second. When uranium allocations are added to the $11.2 billion nonferrous total, 2010 planned exploration spending rises to more than $12.1 billion, a 44% increase from the 2009 total including uranium. MINING.COM
johnsyn
13 years ago
Copper may see shortage for third year
Copper will remain in short supply for a third straight year in 2012 as China-led demand boosts prices, Japan’s top producer said.
Demand will likely exceed supply by 495,000 metric tons in 2011, the biggest deficit since 2004, compared with 214,000 tons last year, said Akira Miura, executive officer of the marketing and raw-material department at Pan Pacific Copper Co., Japan’s biggest producer. The shortage may shrink to 31,000 tons in 2012, he said.
Copper, used in wires and pipes, has climbed 18 percent in the past year, reaching a record $10,190 a ton in February, as the global economy recovers from its worst recession since World War II. Higher prices benefit major producers such as BHP Billiton Ltd. (BHP) andFreeport-McMoRan Copper & Gold Inc. (FCX) The metal is favored by Goldman Sachs Group Inc. because of its “superb supply-demand fundamentals.”
“Even though the market deficit will decline sharply, tightness will continue because of a lower stockpile-to-use ratio,” Miura said in an interview on Sept. 1. The global- inventory ratio may decline to a 1.3-month level in 2012 from an estimated 1.4 this year and 2010’s 1.8, he said.
Global output may increase 1.7 percent to 19.5 million tons in 2011 and 6.2 percent to 20.7 million tons in 2012 with new smelting capacity in China, Miura said. Demand may grow 3.1 percent to 20 million tons this year and 3.8 percent to 20.7 million tons in 2012, he said.
Supply Disruptions
“Copper-supply disruptions will amount to at least 8 percent of total production loss this year, compared to 4 percent to 5 percent we had expected earlier in the year,” Goldman analysts Sal Tharani and Sandeep SM said in a report dated Aug. 31.
“Chinese warehouses have significantly depleted their copper stocks, and opening of positive arbitrage between the China and London Metal Exchange prices could mean increase in copper imports into China,” the analysts wrote. Demand for industrial metals will remain “fairly healthy, driven by emerging markets,” they said.
Demand in China, the biggest consumer, may increase 4.9 percent to 7.5 million tons this year and 6 percent to almost 8 million tons in 2012, Miura said. Output is likely to grow 7 percent to 4.9 million tons this year and 13 percent to 5.5 million tons in 2012, he said.
‘10,000 A Ton’
Any supply disruption will push prices higher in coming months as Chinese demand picks up after reducing domestic stockpiles and the government may not further tighten its monetary policy, he said. Demand in Japan may increase moderately to rebuild after the March 11 earthquake, he said.
“We may see copper prices testing the $10,000-a-ton level again this year,” Miura said. Copper for three-month delivery in London rose as much as 0.4 percent to $9,112.75 a ton before trading at $9,070 at 11:34 a.m. in Tokyo.
China’s demand in the first half was “stronger than it appeared,” Macquarie Group Ltd. said. Real consumption counting scrap was up 7 percent in the first half, in contrast with the reported drop of about 7 percent in refined copper demand for the first seven months this year, Macquarie analyst Bonnie Liu wrote in a report dated today.
‘Sustained Strength’
Liu cited “strong output of copper-containing finished goods like air conditioners and electric power cables, and sustained strength in Chinese construction activity.” Real consumption this year will climb 6.3 percent, down from almost 11 percent last year, with stockpiles at reported and unreported warehouses falling by 270,000 tons after an increase in 135,000 tons in 2010, she wrote.
In Japan, production may drop 12.8 percent to 1.35 million tons this year before gaining 13.2 percent to 1.53 million tons in 2012, he said. Demand may decline 3.9 percent to 1.02 million tons in 2011 before growing 2.9 percent to 1.05 million tons next year, he said.
Japan’s exports of copper may drop 12.4 percent to 430,000 tons in 2011, while its imports will likely more than double to 100,000 tons, the highest level since 2007, he said. The country’s imports may plunge 60 percent to 40,000 tons in 2012, while its exports may rise 20.5 percent to 518,000 tons. – Bloomberg
Tags: Copper prices
Posted by CHINA BUSINESS NEWS on Sep 5 2011. Filed under Precious metals.
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