Copper’s Bullish Tone Continuing in 2018


With increased consumption, prices of copper have been rising-up lately, and the metal was seen to be trading above $3.281 (US/lb), which is up from $2.490 seen last year. Moreover, in the past one month the share prices of copper increased significantly. Copper has hit its highest point in more than a month which has been in line with the rising demand in China (that accounts for about half of global copper demand). Recently, Congo’s minister for mining ordered a joint venture of Chinese investors to cease exporting raw copper and cobalt before processing because they have a low value in the international markets, and this will help in boosting the price of the copper.


Copper Belt with Good Deposits (Source: XAM Company Reports)

In the recent times, copper companies’ share prices have climbed up, for instance, share price of Xanadu Mines Ltd (XAM) which is a copper and gold exploration company went up about 40% in the past one year. Another copper company is Oz Minerals Ltd (OZL) whose share price also rose from $8.07 to $9.16 in last one year. The group is working on its copper gold mine project in terms of expansion. Avanco Resources Ltd has also moved significantly in past one year. Most of the copper companies have increased their dividend pay-out which are generally fully-franked. One of the strongest stock to leverage from the scenario is BHP Billiton Ltd (BHP) whose prices have increased by about 16% in last one year, and the group controls Escondida in Chile, which is the world’s largest copper mine. Australia holds a good chunk of the world’s copper resources after Chile and the recent scenario seems to be an encouraging one for future trends.

The trend seen in late last year has also continued in the new year with London copper surging up on January 02, 2018 with demand in top consumer China expected to be on an improving side in 2018. Thus, prices in the new year are expected to keep up the pace set at four-year highs. Three-months’ copper on the London Metal Exchange surged 0.3% to $7,267.50 a tonne. Market expects copper prices to average $7,280 per tonne in 2018 and $7,720 per tonne in 2019. The support is seen to come from rising infrastructure demand in developing countries and use of electric vehicles (EVs, which need copper in batteries and motors) and renewable energy on the upswing.


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