Here’s a look at 5 of our top copper news stories from the first quarter of this year.
At the end of 2015, most copper news stories surrounded weakening prices for the red metal and growing pressure on producers still weathering the storm.
Analysts weren’t expecting a huge uptick in copper prices for 2016, and that prediction has more or less rung true. Still, copper prices have gained roughly 15 percent since dipping to $1.96 per pound on January 15, and were sitting at about $2.26 last Thursday. No doubt, that’s been positive for investor sentiment, though the metal did fall slightly last week on the back of a stronger dollar.
With that in mind, here’s a look at some of our top copper news articles from the first quarter of the year.
1.Copper Price Forecast 2016: Producers Under Pressure
Our look at the copper price forecast for 2016 was a popular read early in 2016. A stronger US dollar and weaker-than-expected growth in China weighed on copper prices last year, while weak investor sentiment put even more pressure on the red metal.
Stefan Ioannou of Haywood Securities expected tough times to continue for the metal this year, but called for more copper production to come out of the market due to low prices. Specifically, he noted that with copper sitting near $2, roughly 20 percent of the world’s production is not economic on a C1-cash-cost basis. “Hopefully that will be a catalyst that will help prices move higher over the medium term,” he said. Check out more of the forecast here.
2. Copper Price Now Sitting Below $2
Driven by worries over China, the world’s top copper consumer, copper prices were under significant pressure in early January. Stock markets in the country were shut twice that month when a 7-percent drop triggered a circuit-breaker mechanism that shut down trading for the rest of the day.
Copper prices fell to as low as $1.95 in mid January, while a number of analysts and bank researchers lowered their forecasts for the metal. For example, BMO Capital Markets reduced its 2016 copper price forecast from $2.35 to $2 and dropped its long-term nominal copper price forecast from $3.20 to $3.05. Read the full story here.
3. KGHM’s Mark Crawley on Predicting Copper Prices
At AMEBC’s Mineral Exploration Roundup, Mark Crawley, senior vice president, commercial at KGHM International (WSE:KGH), spoke about why it’s nearly impossible to correctly predict copper prices. Among other points, he noted that copper demand and copper supply can be more difficult to quantify than one might think, while additional factors, such as negative sentiment in the commodities sector in general, can also throw a wrench in things. See more of what Crawley had to say here.
4. Why is Freeport-McMoRan’s Share Price Up?
Freeport-McMoRan’s (NYSE:FCX) share price has been on a tear since January. In mid-February, a sale of the company’s interest in its Morenci unincorporated joint venture to Sumitomo Metal Mining (TSE:5713) was seen as helping to drive that price rise. News that activist investor Carl Icahn had upped his stake in the company was also seen as a positive, as was a brief spike in oil prices.
Shares of Freeport are still on the rise, and are now up nearly 50 percent year-to-date. Read the full story here.
5. Copper Prices Still on the Rise
Copper prices have continued their winning streak this month, and the latest report from FocusEconomics points to expectations that a bottom has been reached for the red metal. “On 11 March, the spot price was USD 4,987 per metric ton, which was up 11.9% from the same day in February and was 6.0% higher on a year-to-date basis,” the firm states in the report. Still, FocusEconomics has advised caution, noting that the analysts it surveyed expect copper prices to remain low in 2016 before picking up next year.
As per the firm’s report, the consensus forecast is for copper prices to rise to $4,904 per tonne in Q4 2016, averaging $4,824 for the year. Analysts expect the annual average to rise to $5,120 in 2017. Check out the full article here.
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.