Copper’s Bullish Tone Continuing in 2018

Leave a comment
Macro Economics

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.

cb1.png

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.


Disclaimer

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.

Leave a Reply