Picked up these from another thread, they underline my thoughts on where the copper price is going and our sp will follow:
China's production of copper, iron ore and zinc has rebounded
ROBIN BROMBY | The Australian | December 16, 2013 12:00AM
CHINA landing a space probe on the moon at the weekend is probably as good a reminder as anything that nothing will stop the Middle Kingdom in its quest to become a superpower militarily and economically.
The landing probably won't have the shock effect on the West that the Soviet Union beating the US into space in 1957 with the Sputnik 1 satellite did. After all, back then the US believed it was far superior to the Russians in most respects whereas the West now seems resigned to China eventually becoming the one that matters most.
On the economic front, which concerns us here, the space success coincided with news that, last month, China's refined copper output rose 28 per cent year on year. Iron ore output was up 11 per cent and zinc production by 12 per cent. All three recorded new monthly record highs.
CBA's Lachlan Shaw says the metal data indicates a 20 per cent year-on-year growth in investment, a recovery in electricity output and strong industrial growth.
Deutsche Bank, in its 2014 commodity themes report, advises how to position for the China rebound. The analysts forecast 8.6 per cent growth next year, well ahead of the consensus. They expect Chinese shares to rally by as much as 15 per cent over the coming six months, noting industrial metals and bulk commodities have typically performed well in a bullish China equity environment. Deutsche expects strong copper demand, in particular.
That will be welcome news to copper producers, who face a global surplus next year. On the local front, Tiger Resources (TGS) has just boosted its Congo reserves to 934,000 contained tonnes while Hot Chili (HCH) reports more high-grade hits, including 43m at 1.1 per cent copper from its Productora deposit. Struggling Xanadu Mines (XAM) is working to keeps its Mongolian copper dreams alive by taking on a local partner, no doubt hoping to avoid dramas that hit other foreign companies in that country.
Copper Caps Longest Rally in Three Years as Inventories Decline
Copper futures capped the longest rally in three years as global inventories fell to the lowest in 12 months, signaling rising metals demand as economic growth improves.
Stockpiles tracked by exchanges in London, New York and Shanghai tumbled 24 percent since the end of September and are at the lowest since Dec. 14, 2012. U.S. industrial production climbed in November by the most in a year, while Euro-area factory output grew at a faster pace than economists forecast in December, separate reports showed today.
Copper has rebounded 12 percent since reaching the lowest in almost three years in June as manufacturing expanded in China and the U.S., the world’s biggest consumers. On the London Metal Exchange, supplies available for delivery from warehouses are at the lowest since August 2008. Global production will trail demand by 79,000 metric tons this year, according to Barclays Plc.
“When you start to see these types of stockpile declines, it opens the eyes of those who need copper at some point down the road,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “They’ll go out and start securing copper for future delivery now. And so it becomes a snowball effect of higher prices. I would expect prices to continue to rise.”
Copper futures for delivery in March advanced 0.5 percent to settle at $3.3295 a pound at 1:19 p.m. on the Comex in New York, a seventh straight gain. On the LME, copper for delivery in three months gained 0.5 percent to $7,290 a ton ($3.31 a pound).
‘Good Demand’
Aurubis AG, the world’s second-largest producer of refined copper, expects “good demand” in 2014 for cathode, a form of refined metal, the company said today in a report on its website.
“The metals markets are continuing to finally realize their upside potential, inspired by improving global demand,” Michael Turek, a senior director at Newedge Group SA in New York, said in an e-mail.
Lead, tin and zinc rose in London, while nickel and aluminum fell.
To contact the reporter on this story: Luzi Ann Javier in New York at [email protected]
To contact the editor responsible for this story: Millie Munshi at [email protected]
BTR Price at posting:
25.0¢ Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)