3 Copper Stocks to Watch in 2018

Copper had a tough first half of the year, with prices declining almost 18 percent year-to-date.

Escalating global trade war tensions and increasing concerns about slower demand from China, the world’s largest consumer of copper, have put pressure on the red metal.

Looking ahead, analysts across the board are predicting that copper will average below US$7,000 per tonne for the remainder of 2018 before picking up in 2019.

In their latest report, Raymond James analysts shared their top copper stocks to watch in 2018, revising their copper price forecast for the rest of the year.

Despite leaving their long-term outlook for the base metal unchanged, the analysts said they “expect margins for the base metals producers to be under pressure in 2Q18 with zinc and copper prices down 9 percent and 1 percent respectively quarter-on-quarter.”

With that in mind, we’ve taken a brief look at the three companies that the Raymond James analysts have on their watch list.

1. First Quantum Minerals (TSX:FM)

Current price: C$17.02; year-to-date gain: -5.70 percent

Major miner First Quantum Minerals produces mainly copper, gold, nickel and zinc. The company’s assets are located in Zambia, Spain, Mauritania, Australia, Finland, Turkey, Panama, Argentina and Peru.

First Quantum operates six mines, namely the Kansanshi copper-gold mine, the Sentinel copper mine, the Guelb Moghrein copper-gold mine, the Las Cruces copper mine, the Pyhäsalmi copper-zinc mine and the Çayeli copper-zinc mine.

The company is also developing the Cobre Panama, Taca Taca, Haquira and Trident copper projects.

In 2017, First Quantum recorded the highest copper production in its history at 573,963 tonnes in addition to 199,736 ounces of gold and 17,837 tonnes of nickel.

2. Teck Resources (TSX:TECK.B,NYSE:TECK,)

Current price: US$22.44; year-to-date gain: -16.64 percent

Teck Resources bills itself as Canada’s largest diversified resource company, with business units focused on zinc, copper, steelmaking coal and energy. The company is a top 10 copper producer in the Americas, with four operating copper mines and a pipeline of development projects in North and South America.

Teck operates the Highland Valley copper mine in Canada, the Quebrada Blanca copper mine in Northern Chile and the Carmen de Andacollo copper mine in Central Chile.

3. Ero Copper (TSX:ERO)

Current price: C$8.57; year-to-date gain: 7.62 percent

Vancouver-based Ero Copper is focused on copper production growth from the MCSA mining complex, located in Brazil. The company currently mines copper ore from the Pilar underground and the Surubim open-pit mines, and is developing the new high-grade Vermelhos copper mine.

The company is also developing the Boa Esperanca copper project, which is located in Brazil as well. According to a feasibility study, the project has the potential to add approximately 163,000 tonnes of recovered copper over an initial mine life of nine years, including stockpile reprocessing.

The data for this article was retrieved on August 23, 2018.

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