Go To Top

 

16th August, 2018

A supply crunch and growing demand will keep copper on track for longer-term gains despite a trade war and emerging market tensions that are roiling prices, according to Australian producer OZ Minerals Ltd.

The metal rebounded Thursday to erase some losses after a 4 percent tumble a day earlier that sent it into a bear market. The Adelaide-based miner reported first-half net profit that rose 59 percent to A$128 million (US$93 million) on stronger prices and cost cuts.

“We’re seeing some short-term volatility, but I’m still confident on the longer-term outlook,” Chief Executive Officer Andrew Cole said in a television interview. “There’s no new supply coming into the market that’s been recently announced and demand figures aren’t changed all that much over the medium to long term.”

OZ Minerals is constructing a second Australian mine, and in March agreed to pay A$418 million (US$324 million) for Avanco Resources Ltd. to add an operation in Brazil and a suite of development projects. Exploration teams are also examining prospects across Australia, Portugal and Sweden.

A lack of new mine projects means copper is facing a “structural deficit” as demand builds, according to London-based Sanford C. Bernstein analyst Paul Gait. The market may face a shortfall of about 83,000 metric tons in 2019, according to market analysts.

“There is a real supply-side pressure on copper resources in the medium to long term,” Cole said in the interview. “Having new projects in your pipeline -- like we have -- puts you in a very strong position.”

Source: Bloomberg

Latest News