cu poised to break through usd8000 per tonne

Source: www.miningnews.net

$9000 copper a chance: analyst

Paul Garvey
Tuesday, 17 April 2007

WITH the spot price of copper poised to break through $US8000 per tonne in the next few days, a leading copper research house is already flagging the possibility of the red metal hitting $9000/t.



The copper spot price has rebounded strongly in the past few months after bottoming out around $5300/t in early February, climbing overnight to $7794/t.

While copper stockpiles have fallen steadily since February, the latest runs in the copper price have been driven by the twin catalysts of floods blocking shipments from Xstrata's Alumbrera mine in Argentina, and fears of a wage dispute at the giant Grasberg mine in Indonesia.

The latest events and their impact on the copper price make comments in the latest CRU Copper Monitor sound prophetic.

The latest monitor, issued shortly after the CRU World Copper Conference in Chile late last month, said it could take only "a relatively minor supply-side event" to push copper back over $8000/t. Copper last traded above the psychological barrier in early September 2006.

CRU also went one further, adding that a major disruption and continued Chinese consumption could very quickly push copper to the never-before-seen heights of $9000/t.

With strikes at the Escondida and Norte mines in Chile contributing to the record copper price high of almost $8800/t set last May, CRU singled out some looming potential disruption scenarios.

"After last year's significant stoppages in Chile, notably at Escondida and Codelco Norte, the focus now moves to Peru where Cuajone and Toquepala have settlements that are scheduled to be resolved around May," CRU said.

"A current strike at the La Oroya copper-lead-zinc smelter in Peru may be a portent in this respect. Shifting back to Chile, June brings with it a labour contract expiry date at Collahuasi whilst interest in July and August will then switch to the Radomiro Tomic and the El Salvador minesites.

"Waiting a little beyond the present time horizon sits Antofagasta's Los Pelambres labour contract set for expiry at the end of September."

In addition to the $41.50 gain in the copper spot price to $7794/t, three-month copper added $25 to $7730/t.

Since the copper price bottomed out in early February, Australia's pure copper plays have, by and large, had a field day.

Advanced Scandinavia-focused copper play Vulcan Resources has been the big winner, adding 68.25% to its share price since the February low, while Anvil Mining (up 44%) Equinox Minerals (up 26.8%) and CopperCo (up 21.6%) have also posted big gains.


End.

Cheers, Pie