Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Chinese Tech Stocks CCP Paranoia and Best AI Tech Stocks ETF - 26th Oct 21
Food Prices & Farm Inputs Getting Hard to Stomach - 26th Oct 21
Has Zillow’s Collapse Signaled A Warning For The Capital Markets? - 26th Oct 21
Dave Antrobus Welcomes Caribou to Award-Winning Group Inc & Co - 26th Oct 21
Stock Market New Intermediate uptrend - 26th Oct 21
Investing in Crypto Currencies With Both Eyes WIDE OPEN! - 25th Oct 21
Is Bitcoin a Better Inflation Hedge Than Gold? - 25th Oct 21
S&P 500 Stirs the Gold Pot - 25th Oct 21
Stock Market Against Bond Market Odds - 25th Oct 21
Inflation Consequences for the Stock Market, FED Balance Sheet - 24th Oct 21
To Be or Not to Be: How the Evergrande Crisis Can Affect Gold Price - 24th Oct 21
During a Market Mania, "no prudent professional is perceived to add value" - 24th Oct 21
Stock Market S&P500 Rallies Above $4400 – May Attempt To Advance To $4750~$4800 - 24th Oct 21
Inflation and the Crazy Crypto Markets - 23rd Oct 21
Easy PC Upgrades with Motherboard Combos - Overclockers UK Unboxing - MB, Memory and Ryzen 5600x CPU - 23rd Oct 21
Gold Mining Stocks Q3 2021 - 23rd Oct 21
Gold calmly continues cobbling its Handle, Miners lay in wait - 23rd Oct 21
US Economy Has Been in an Economic Depression Since 2008 - 22nd Oct 21
Extreme Ratios Point to Gold and Silver Price Readjustments - 22nd Oct 21
Bitcoin $100K or Ethereum $10K—which happens first? - 22nd Oct 21
This Isn’t Sci-Fi: How AI Is About To Disrupt This $11 Trillion Industry - 22nd Oct 21
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Copper: An Insider’s Perspective

Commodities / Metals & Mining Mar 30, 2010 - 03:34 AM GMT

By: Q1_Publishing


Best Financial Markets Analysis ArticleCopper prices are up a 160% in the past year and a half.

Most investors are wondering is the run over?

Here’s someone to help us determine copper’s next move.

About a year everyone was scared. The major indices were sitting at multi-year lows. Commodities were tanking. And it seemed like the bad news was only going to get worse and worse.

It was bleak. Most investors were cashing out. No one wanted to know where they opportunities were…they just wanted out.

At the time, we had the chance to get together with Juan Villarzu to get an inside perspective on the copper market.

As the former head of Codelco, the world’s largest copper mining company, and the Chairman of Apoquindo Minerals (TSXV:AQM), a rapidly unfolding South American copper story, he’s definitely someone that has to know the copper industry very well.

At the time we got together with him he told us, “Copper will be at $2 by the end of the year, and will be above $2 next year.”

It was a bit outrageous. Copper had just fallen from $4 per pound to below $1.50 in about six months time and few saw any type of rebound. But Villarzu, who knew the situation well, did see the light at the end of a short tunnel.

Since then copper prices have rebounded to more than $3.30 per pound today. That’s a gain of more than 160%.

But the recent run in copper has sparked resurgence of uncertainty in the copper market.
That’s why we’re glad to let you know today we recently got back together with Villarzu to get another insider’s take on what’s going on with copper now.

In an exclusive interview with Andrew Mickey, Q1 Publishing’s Chief Investment Strategist, Villarzu gives us a copper industry insider’s perspective on:

- Where copper prices are headed
- Whether current copper prices are really sustainable
- The real impact of the credit crisis on the copper industry
- What copper’s supply/demand picture really looks like
- Why you “must be in South America” if you want copper
- What he looks for in prospective mining projects
- and more…

All the details are below in Copper: An Insider’s Perspective.

Good investing,

Q1 Publishing Investment Research Team

Copper: An Insider’s Perspective

Andrew Mickey: With copper at $3 per pound, where’s the demand coming from?

Juan Villarzu: The answer is China. 68% of the expected growth in refined copper consumption between 2010 and 2014 will be explained by China’s copper appetite. Russia (7%), India (5.4%) and South Korea (3,6%) are the distant followers.

Andrew Mickey: Last month China posted GDP growth above 10%. But there has been a strong rebound in the economies of Thailand, Taiwan, and a few others. Do you see the periphery countries starting to play a larger role in the copper markets?

Juan Villarzu: Since the mid-nineties copper consumption has grown much faster in the developing economies than in the developed ones.

During this period, consumption in developed economies has shrank while average annual consumption growth in developing economies, excluding China, and China has been, around 5% and 11%, respectively, I expect this trend to continue for some time.

This is consistent with expectations of a fast growth with high copper content (urbanization, infrastructure, durable consumption goods).

Andrew Mickey: As you know, quantity demand is heavily impacted by price. For example, gasoline consumption starts to drop off when prices at the pump hit $3 a gallon.

At what price do you see copper prices going before there is a significant demand impact?

Juan Villarzu: I think that the real (constant purchasing power) price of copper will fluctuate at around US$ 3 per pound of fine copper during the next five years or more.

It is not going to be a smooth ride; as in the money and exchange rate markets volatility will be a permanent feature.

As recent evidence shows, this price level does not trigger major substitution initiatives. In fact, the higher price of copper has been accompanied by higher prices of aluminum and relative prices have not changed significantly. 

I would also like to point out that copper consumption growth is not entirely explained by GDP growth; recyclability, energy efficiency, antibacterial capabilities, are features that make copper an indispensable material.   

Andrew Mickey: John Mackenzie, Anglo American’s head of copper recently said he expects global copper stockpiles to fall over the longer-term. He specifically noted, “There aren’t enough high-quality projects in the world.”

Do you see a similar situation? Why?

Learn more about what the man who ran the largest copper mining company in the world sees ahead for the supply/demand picture for copper, what he for looks for in copper development project, and get the inside scoop on the future of copper mining in South America in Part II of Copper: An Insider’s Perspective here.

Good investing,

Andrew Mickey
Chief Investment Strategist, Q1 Publishing

Disclosure: Author currently holds a long position in Silvercorp Metals (SVM), physical silver, and no position in any of the other companies mentioned.

Q1 Publishing is committed to providing investors with well-researched, level-headed, no-nonsense, analysis and investment advice that will allow you to secure enduring wealth and independence.

© 2010 Copyright Q1 Publishing - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in