Nice to see the copper price graph turn up again over night.With...

Nice to see the copper price graph turn up again over night.

With a pessimistic lender involved in the process we can be certain that the numbers in the DFS will be well researched and scrutinised. Lenders are known to take under promising to the extreme.

I read with interest an article in this mornings Australian regarding a road trip Goldman Sachs went on and was pleased to lean they think the pain in the copper price will be behind us by the time HGO is hitting its straps.

GS retains its structural bull story on copper, with long term prices of US$6.40-6.80/lb (well beyond record levels) in 2024 and 2025, but has reduced its short term forecasts to US$3.84/lb in 2022 and US$4/lb in 2023.

That should help frame the DFS and give the bankers a bit of comfort on the upside.


"Commodities trade on sentiment as bearish mood bites

According to Goldman Sachs mining analysts Paul Young and Hugo Nicolaci, metals are currently trading with falling market sentiment, with inventory and cost curve analysis “broadly irrelevant” in the short term price.

That has led GS’ global commodities team to cut near term aluminium, copper and iron ore pricing before fundamentals begin coming to the fore over the next 12-18 months.

There are few surprises that investors GS speaks to are most bullish on energy commodities in the wake of the Russia-Ukraine war and subsequent sanctions as well.

Our recent 2-week offshore marketing roadshow across Singapore, London, and the US, meeting with >50 investment funds and numerous mining companies and commodity traders, indicated that investors are most positive on energy (thermal coal, natural gas etc) and most bearish on steel, copper and aluminium on an expected global economic slowdown in 2H22, with few investors willing to take a positive view on a recovery in Chinese construction and commodity demand,” they said in a note this week.

GS retains its structural bull story on copper, with long term prices of US$6.40-6.80/lb (well beyond record levels) in 2024 and 2025, but has reduced its short term forecasts to US$3.84/lb in 2022 and US$4/lb in 2023.