3 Copper Stocks to Watch in 2019

Two of the world’s biggest nations spent the last quarter taunting each other, and copper prices took a small blow in the crossfire.

With US-China trade relations continuing to drag their feet, base metals investors have found themselves in a position of precarious uncertainty. During Q2, the red metal simmered in the marketplace as onlookers remained skittish of the two major nations duking it out.

In their latest report, Raymond James analysts shared their top copper stocks to watch in 2019 and reduced their average annual copper price forecast.

The financial services firm brought its forecast down from US$2.98 per pound to US$2.81, marking an approximate 6 percent drop. The analysts explain in the report that while reductions took place across the base metal commodities, copper experienced the biggest change. Even so, in spite of the drop, they remain confident in copper’s long-term outlook.

“Our preferred base metal longer term continues to be copper, where we expect a somewhat balanced market in 2019 and 2020 before entering into a marked supply/demand deficit in 2021,” they said.

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,OTC Pink:FQVLF)

Current share price: C$13.31; year-to-date movement: +20.56 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 late June, the company sent out its first shipment of copper concentrate from Cobre Panama with a total load of 31,377 wet metric tonnes; ramp up at the asset has continued in the meantime.

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

Current share price: C$28.99; year-to-date movement: -1.36 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. In late May, Teck signed a US$2.5 billion financing agreement to fund the development of the Quebrada Blanca Phase 2 project.

3. Ero Copper (TSX:ERO)

Current share price: C$25.05; year-to-date movement: +155.35 percent

Ero Copper has three key assets under its belt: the MCSA mining complex, the Boa Esperança copper project and the NX gold mine, all of which are located in Brazil. The company claims its primary focus is on copper production growth from the Vale do Curaçá property, part of the MCSA complex.

The company had a fairly quiet second quarter this year with the exception of exploration drilling done at its Vermelhos and Pilar mines. The work done at Pilar uncovered a new mineralized zone dubbed Baraúna, which is located below the southern area of the open pit.

The data for this article was retrieved on July 22, 2019.

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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.