5 Things to Know About the Copper Price Today: September 2015

The copper price today is still down about 26 percent over the past year, despite getting a bit of a bump in September.
This week, the spot copper price per pound was down about 2.78 percent, to $2.31. Indeed, the likes of Goldman Sachs (NYSE:GS) are still holding up their bearish predictions on copper — that firm expects the copper price to hit $4,800 per ton by the end of the year.
However, other firms are more positive on copper, predicting a tighter market that will be supportive of the copper price in the medium term. Capital Economics, for example, sees the metal’s price rising to $6,250 per ton by the end of 2015.

Here’s a quick rundown of what’s been going on in the copper space lately:

1. Earthquake in Chile

Last week, an 8.3-magnitude earthquake struck off the coast of Chile, killing at least 11 people and causing at least 1 million to leave their homes due to an ensuing tsunami warning. The world’s top copper producer has already been hit twice with heavy rains and flooding this year, prompting concern over potential threats to copper supply.
Copper miners Antofagasta (LSE:ANTO) and state-owned Codelco reported no damage to their mining operations and no injuries to workers. However, operations at some mines were halted as a result of the quake, and a state of emergency was declared in the Coquimbo region, where Antofagasta’s Los Pelambres mine is located. LME copper hit a near eight-month high of $5,440.50 a ton on the news.

2. Glencore plans to cut supply; Newmont could hit a snag with Indonesian exports

Glencore (LSE:GLEN) announced earlier this month that it would suspend copper production at its Mopani mines in Zambia and at its Katanga mining unit in the Democratic Republic of the Congo (DRC) for approximately 18 months, taking an estimated 400,000 tons of copper cathode out of the market. More recently, Reuters reported that Newmont Mining (NYSE:NEM) won’t be getting renewed licenses to export copper from its Indonesian operations. CEO Gary Goldberg told the publication it would take “a couple of weeks” to get everything straightened out.

3. El Niño

Meanwhile, the return of an El Niño weather pattern this year has European smelter Aurubis worried about further troubles for copper production in Chile and Peru. According to Mineweb, Capital Economics agrees, and is calling for the copper price to hit $6,250 per ton by the end of the year and $7,000 per ton by 2016.
Capital Economics’ senior commodities economist, Caroline Bain, wrote that El Niño could mean more floods in Chile and unusually dry weather in Indonesia, leading to a “lack of water in rivers to transport the metal to the port.”

4. Goldman still bearish

While Capital Economics has reiterated its bullish position on copper, and firms like JPMorgan Chase (NYSE:JPM) are getting more positive on the mining sector overall, Goldman Sachs has another view. As mentioned, the firm sees copper moving to $4,800 per ton by the end of the year and to $4,500 by the end of 2016 — quite a difference from Capital Economics’s position.
“We do not see these bearish drivers changing for some time, and as such producers are set to remain under pressure and likely to rationalize global production” Bloomberg quotes Goldman analysts as writing in a note, also citing weakness in China as a key driver for the prediction.

5. Las Bambas coming online 2016

Finally, while Glencore is making cuts to production and there are indications that more supply could come off the market, Reuters reported Wednesday that MMG’s (HKEX:1208) $7.4-billion Las Bambas project is still set to come online in May or June 2016. The mine will ramp up to 400,000 tons of production by 2017.

Company news

Moag Copper Gold Resources (CSE:MOG,OTCQB:MGCPF) reported results from drilling at its Mace property on Thursday. The company hit moly-copper-silver mineralization in several drill holes, with highlights including 0.378 percent moly, 0.209 percent copper and 0.6 g/t silver over 2.1 meters.
Meanwhile, Copper North Mining (TSXV:COL) reported that drill results from its Carmacks copper-gold-silver project in Canada’s Yukon have confirmed a thick, near-surface zone of oxide copper. Highlights include intersections of 0.37 percent copper, 0.09 g/t gold and 1.21 g/t silver over 102.1 meters, as well as 0.35 percent copper, 0.08 g/t gold and 0.98 g/t silver over 119.6 meters.
Solvista Gold (TSXV:SVV) also had assay results to report this week. Drill results from its Talbot property in Manitoba include 6.1 percent copper, 8.2 g/t gold, 5 percent zinc and 112.1 g/t silver over 9.13 meters, including 5.9 percent copper, 16.6 g/t gold, 5.8 percent zinc and 135.6 g/t silver over 3.8 meters.
Finally, there were further developments for the Ivanhoe Mines (TSX:IVN) copper story this week, as the DRC dropped its previous objections to Ivanhoe’s sale of a stake in its Kamoa copper project to China’s Zijin Mining (HKEX:2899). As The Globe and Mail notes, Ivanhoe will sell a further 15-percent stake in the project to the DRC government, which currently owns 5 percent.

Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Copper North is a client of the Investing News Network. This article is not paid for content.