Copper stocks ‘getting closer to the bottom’ in metal’s potential …
Recent weakness in the copper price has brought the market closer to a fundamental inflection point, UBS analysts wrote in a note to clients, as they now forecast only a modest surplus in 2023, moving to a growing deficit from 2025.
“In our opinion, this increases the risk of material price upside over the next 2-3 years (potentially copper's ‘lithium moment’),” the analysts said.
Near term, though, they caution that copper prices could test theoretic cost support levels (~$3.20/pound or $7,000/tonne) if the already weak physical signals deteriorate further as supply lifts, but they do not see a protracted period of oversupply driving prices into the cost curve for an extended period.
Against that backdrop, the analysts at UBS believe the risk versus reward for copper equities is improving and the medium-term outlook is constructive. They currently have ‘Buy’ ratings on Zijin Mining Group and CMOC (China Molybdenum).
Other large-cap names that could benefit from higher copper prices include Freeport-McMoRan Inc (NYSE:FCX)[1] and Southern Copper Corporation (NYSE:SCCO)[2], while there are some copper companies that could be targeted for acquisition[3].
As well, smaller, more development-stage companies that could get a boost include C3 Metals Inc (TSX-V:CCCM, OTC:CARCF)[4], Cordoba Minerals Corp (TSX-V:CDB, OTCQB:CDBMF)[5], Fabled Copper Corp, Los Andes Copper Ltd (TSX-V:LA)[6], and Kodiak Copper Corp. (TSX-V:KDK)[7]
Contact Sean at [email protected]
References
- ^ Freeport-McMoRan Inc (NYSE:FCX) (www.proactiveinvestors.co.uk)
- ^ Southern Copper Corporation (NYSE:SCCO) (www.proactiveinvestors.co.uk)
- ^ could be targeted for acquisition (www.proactiveinvestors.com)
- ^ C3 Metals Inc (TSX-V:CCCM, OTC:CARCF) (www.proactiveinvestors.co.uk)
- ^ Cordoba Minerals Corp (TSX-V:CDB, OTCQB:CDBMF) (www.proactiveinvestors.co.uk)
- ^ Los Andes Copper Ltd (TSX-V:LA) (www.proactiveinvestors.co.uk)
- ^ Kodiak Copper Corp. (TSX-V:KDK) (www.proactiveinvestors.co.uk)