Base Metals Weekly Round-Up: Looking Back on Copper in Q3

This week the metals world revolved around London, as analysts and big players in the space travelled to the UK to talk shop at the annual LME Week.

Around the world, election watchers were transfixed by the results out of Brazil, with Jair Bolsonaro almost winning the presidential election outright, capturing 46.06 percent of the vote in the first round —sweeping ahead of second-placed Fernando Haddad who languished with 29.28 percent. Round two will be in late October.

While plenty of stories came out of the week, the markets didn’t stop, and the base metals stayed in their holding pattern of maintaining gains over the past few weeks but not doing much else.

Copper had a brief expedition to US$6,292 per tonne over the week before falling to ever so slightly below where it started on Monday (October 8), hitting US$6,152 on Thursday (October 11), some 0.25 percent down.

Zinc did the same thing as copper, peaking in the middle of the week at US$2,697 before falling below its Monday start, down 0.41 percent over the week to US$2,637 on Thursday.

No surprises then that nickel was singing from the same hymn book, peaking on Wednesday (October 10) at US$12,750. In a pleasant departure from monotony, the battery metal was trading at a higher value on Thursday than on Monday, at US$12,410—0.2 percent above where it started at US$12,385.

Base metals top news stories

1. Copper Price Update: Q3 2018 in Review

This week, the Investing News Network (INN) took a look back at how the red metal fared in Q3, with a bounty of news developments to draw on over the quarter.

GFMS Thomson Reuters base metals analyst Karen Norton said that the “timely settlement at the Escondida mine” was possibly the biggest story of the quarter, while Cormark Securities analyst Stefan Ioannou highlighted Zijin Minings (HKEX:2899) moves in Serbia as a big development.

Overall analysts around the world paid homage to the ongoing trade war as a big influence in not only the copper space — but all the base metals as investors stay their hand on big decisions.

Analysts agreed that the copper price would edge upwards over the remainder of 2018 and into next year, so watch this space.

2. The Best Copper Stocks On the TSX and TSXV

In two articles covering the stock markets in Toronto, INN took a look at the best copper stocks (so far) for 2018.

On the TSX, Nevsun Resources (TSX:NSU), Trilogy Metals, TSX:TMQ), Atalaya Mining (TSX:AYM), Ero Copper (TSX:ERO) and Sierra Metals (TSX:SMT) made the cut, with each company posting impressive gains due to various fortunes; from takeovers (Nevsun) to discoveries (Ero) and preliminary economic assessments (Sierra) — all events that have tantalized the markets.

The juniors over on the TSXV also saw plenty of action, with Evrim Resources (TSXV:EVM) leading a pack that included Oroco Resource (TSXV:OCO), Kintavar Exploration (TSXV:KTR), Pan Global Resources (TSXV:PGZ) and Aethon Minerals (TSXV:AET).

3. Just in Case: Chile Looks Beyond Current Trade Partners

In a story right out of LME Week, the mining minister of Chile, Baldo Prokurica, said that his country was considering further opening up to foreign investors as the battery metals boom creates more demand for resources Chile has in spades.

“Chile is to electric vehicles what Saudi Arabia is to crude oil,” said Prokurica.

Prokurica said that in order to shield Chile from the trade war and benefit from its massive mineral reserves, it was looking to increase and improve the number of deals it had with its trading partners.

According to the interview with Reuters, its trade deals with India were worth further scrutiny to achieve more value. Currently, the two countries have a preferential trade agreement between them.

In other base metals news

In other news, before the ink was dry on the new ownership arrangement between Freeport McMoRan (NYSE:FCX) and the Indonesian government, its CEO, Richard Adkerson, told Bloomberg that all options were on the table for the Phoenix-based company, even its sale.

“But if an opportunity for us to sell to another company would arise, and that would be good for our shareholders, you would see us trying to get the best deal we can get as opposed to being a company where management is trying to protect itself,” he said.

Chile’s Codelco has a list of upgrades, overhauls and improvements it wants to carry out on its portfolio of existing mines, but to go shopping it needs US$1 billion (to start with); money it plans to raise through 2019, according to its chairman Juan Benavides. The price tag on its entire investment program over the next years comes to US$40 billion.

In Australia, BHP ( ASX:BHP,NYSE:BHP,LSE:BLT) said it plans to restart its Olympic Dam copper facility in October, after repairs and improvements over the past few months.

Staying in the land down under, iron ore shipments out of Port Hedland rose by 5.3 percent in September to 43.5 million tonnes, with the majority of exports going to China, which is proving resilient in the face of the trade war.

In Canada, the planned sale of the Minto mine by Capstone Mining (TSX:CS) fell through, leading to the Yukon copper mine being placed into care and maintenance for the foreseeable future while Capstone considers its options.

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Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.