Base-metal analysts and tarnished copper miners are optimistic on a potential bull trend in copper amid optimism around U.S.-China trade talks and growing scarcity of the metal that’s offsetting concerns about a Chinese economic slowdown.
Copper hit an all-time high of US$10,190 per ton in 2011, but has been on a roller coaster ever since. The metal, considered a key barometer of the global economy given its various uses, hit a four-year high of US$7,348 last June before plunging to US$5,725 in early January. Since then it has clawed its way back to US$6,426.50 per ton, up 7.7 per cent since the start of the year.
The upturn comes as a relief for the Canadian copper industry, which produces approximately 600,000 tonnes annually — three per cent of global supply. Canadian companies such as Hudbay Minerals Inc. (up 52.61 per cent year-to-date), Imperial Metals Corp. (up 71.88 per cent), Taseko Mines Ltd. (up 10 per cent) and Capstone Mining Corp. (up 6.5 per cent) are among some of the major copper producers riding the latest copper rally.
Brain Bergot, vice-president investor relations at Taseko, which owns 75 per cent of B.C.’s Gibraltar Mine, says he’s optimistic about an industry readjustment, fuelled by shrinking copper supply and a sliding loonie. But he’s concerned about China’s economic slowdown.
“We believe the fundamentals for copper are getting stronger every day,” he said. “There’s limited new supply, and copper demand continues to grow at historic levels — around two per cent a year.”
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