There’s good news and bad news for copper investors in the recent study released by the International Copper Study Group (ICSG). According to their copper forecasts, global demand will exceed supply by 240,000 tonnes in 2012. That should help copper prices in 2012, but the ICSG expects a copper production surplus of 350,000 tonnes in 2013.
The ICSG is careful to point out that the surplus of 350,000 tonnes is “relatively small” and “could vary from those projected.” But their numbers align with what other organizations expect.
A report from UBS shows global copper mine production grew less than 1 percent a year between 2009 and 2011. That was temporary, though, as production numbers are poised to surge to 8.5 percent a year through 2014 (per the Wall Street Journal).
“If China cannot absorb the copper flowing into it, then the outlook for copper is negative,” UBS said in the report.
Growth in China is key as the country consumes 40 percent of the world’s copper supplies. It makes sense then that copper investors grew nervous after disappointing growth numbers out of China during Q1. Still, there were signs in April that growth’s accelerating behind the Great Wall. China’s purchasing managers’ index (PMI) rose to a 13-month high of 53.3 in April (per Reuters).
“If we start to see China coming back more strongly in the second half, which is something that we expect, then we could see, you know, stocks starting to come down to really critically low levels and we could see prices sort of bouncing up,” Peter Ghilchik, multi-commodity manager with CRU in London, said recently (per Minyanville). In his words, that could push copper prices toward $10,000 per tonne by the second quarter of 2013 – a record level that we haven’t seen since early 2011.
Other copper price forecasts:
- Copper will trade in a range between $8,300 and $8,800 per tonne in 2012 according to the Thomson Reuters GFMS Copper Survey (per Reuters).
- CRU believes copper prices will average $3.85/pound for the year with a peak late in 2012 around $8,650 per tonne.
Our favorite copper price prediction comes from Citi Investment Research – a daring group of analysts who are willing to project prices far off in the future. They see copper hitting $3.80 in 2013, then falling to $3.61 per pound in 2014 (per the Wall Street Journal).
In the near-term, look for copper prices to get a temporary boost off news that copper inventories monitored by the LME have fallen to their lowest levels since 2008 at 241,550 tons (per Reuters).
Altogether in 2012, copper prices have risen about 10 percent. Let’s hope the red metal can keep that trend intact – at least until miners start flooding the market with new supply in 2013.
Related
|
UNCOVER THE NEXT MINING GIANT
|
THE END OF FIAT CURRENCY?
|
|
THE NEXT BIG THING
How to identify silver mining takeover targets in 2012 |
FALSE PROFITS
Absolute proof of gold price manipulation? |
|
GAZING AHEAD
|
THE BIGGEST RETAILER IN THE WORLD?
|
TradingStocks.me: If you had a few sentences to tell people why they should invest in African Metals Corp., what would you say?
Since copper is so integral to the expansion the global economy, economic growth means higher copper prices. The numbers are skewed toward China, though. Last year, the PRC alone accounted for 40 percent of global refined copper demand. We can get an idea of just how much growth analysts expect to see in China and around the world in 2012 by taking a look at their copper price predictions for the year. Here are five of them:
Lithium stocks are frequently compared to oil stocks. While oil powered the vehicles of the past, lithium-ion batteries will likely be integral to almost all forms of transportation in the future (see my post 
When Tesla Motors Inc. (NASDAQ:TSLA) unveiled the company’s luxury electric car, the Roadster, it took the rest of the car industry by surprise. Chevy and Nissan had banked on enormous lithium batteries in their respective electric cars (the Volt and the Leaf), while the Roadster linked together thousands of small lithium-ion batteries (not unlike what you’ll find in your laptop). The net effect was lower costs and higher performance.
1) Raw materials = massive profits. Last year, Glencore logged earnings before interest, taxes, depreciation and amortization (EBITDA) of $6.2-billion (per the 
Despite the fact that China promised more cooperation with foreign buyers of rare earths, the government was vague enough to make investors nervous about the changes underway in the sector as stocks in several rare earth mining companies rose yesterday. Avalon Rare Metals Inc. (AMEX:AVL) shot up nearly 7 percent, and Australia’s Lynas Corp. (PINK:LYSCF) rose more than 2 percent.
Now, lithium-ion is the standard in a rapidly-growing industry, and that’s driven up demand and prices for the metal. That puts young lithium mining stocks in a great position to capitalize on growing demand in the years to come. Here are three reasons to consider adding Lithium Americas Corp. (TSE:LAC) to your portfolio: 
Mega Uranium Ltd. (TSE:MGA). Based in Canada, Mega Uranium is focused on properties in Cameroon, Canada and Australia – home to the world’s largest uranium deposits. Mega’s massive Lake Maitland Project is in the feasibility study stage. The project has an Indicated Resource of 28.7 million tons of U3O8 and an Inferred Resource of 3.6 million tons. The stock is down 7 percent year-to-date and up 60 percent over the past 12 months.
