I actually think strengthening copper prices today is bad news for CDU.
The manager world's largest resources fund has stated he expects a copper shortage in 2015, with the important proviso that currently mothballed projects stay mothballed:
These comments were made about 3 months ago when pessimism surrounding China's growth and mineral prices was at its peak.
Since then the mood has improved substantially. It's reasonable then to assume those previously stalled new copper mines will now go ahead at full steam.
On that basis, you'd expect BlackRock's prediction regarding a copper shortage in 2015 is no longer looking likely.
I guess in the end it's just economics. Strong prices today will lead to high supply in the years to come which will lead to lower prices. Conversely, low prices today will mean copper mines won't get built, leading to undersupply within a few years and strong copper prices.
Unfortunately for Cudeco, since they do not benefit at all from today's copper price, but rather the price maybe 1.5 years from now, they should be hoping for low prices today, not high.
CDU Price at posting:
$1.64 Sentiment: None Disclosure: Not Held
