Plus, first assays for Sunstone’s porphyry play should be close, runaway mineral sands prices a big tailwind for Strandline and Chris Cairns’ new gold float E79 shakes off gold market weakness with strong demand for IPO.
The copper stocks have not been spared from the broader market malaise. That’s despite the copper price remaining nice and strong at $US4.17/lb.
Plug the spot price into the current earnings period and profits for the producers are going to be substantially higher than the pricing of copper equities would have you believe.
If there was a feeling the copper price was about to tank, fair enough. But it is near-impossible to find a forecaster who thinks the copper price is headed for a dive like say, iron ore.
Goldman Sachs renewed its $US5/lb copper call by the end of year in June, and Glencore’s Ivan Glasenberg reckons we’re on our way (as does Goldman) to $US6.80/lb copper come 2025.
There will some up and downs for the copper price before 2025.
That is a pivotal year because it is when a combination of demand from the global decarbonisation and electrification push smashes into a forecast structural shortage in supply because of declining grades, mine depletion and a lack of new mine developments.
The good news in all that is the copper stocks have earnings upside in the here-and-now, which is not being reflected in their share prices. And they also have longer-term appeal when the supply deficit comes home to roost.
It’s why the sell-off in Sandfire (SFR) following its game-changing $2.6 billion acquisition of the MATSA complex in sunny Spain will not last. Renewed broker targets on the stock following the deal suggests as much.
The average 12-month target price from six brokers for Sandfire was $7.40, with a high of $8.80 and a low of $6.40. Sandfire traded on Thursday at $5.43. That was up 5.7% on the day, suggesting the re-rating of the stock – and perhaps the broader ASX copper sector - is underway.
https://www.livewiremarkets.com/wires/longer-term-appeal-of-copper-stocks-just-increased-thanks-to-september-sell-off
live wire markets com
Longer-term appeal of copper stocks just increased thanks to...
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Last
95.0¢ |
Change
0.020(2.15%) |
Mkt cap ! $143.7M | |||
| Open | High | Low | Value | Volume |
| 93.0¢ | 95.0¢ | 91.0¢ | $118.3K | 127.6K |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 1 | 4021 | 92.0¢ |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| 95.0¢ | 6773 | 2 |
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| Last trade - 16.10pm 19/07/2024 (20 minute delay) ? |
| HCH (ASX) Chart |