Copper prices to stabilize “very profitably”, says Scotiabank economist PDF Print E-mail
Wednesday, 02 November 2011 09:29

 

Source: Mining Weekly

Copper has been on a roller coaster ride this past year, with its price hitting a record USD 4.60 a pound before diving to USD 3.08 a pound. However Scotiabank economist and commodity markets specialist Patricia Mohr said the metal would likely average “a very profitable” USD 4 a pound this year and next. Copper is a major export of Mongolia.

Copper prices could rally further next spring as China rebuilds its inventories. Toward the end of the year, new mine production coming on stream could push its price back down, however. In the near term, Mohr was upbeat on prices for the metal, used in electrical wiring and plumbing.
“Copper prices were over-sold in early October, given prospects for a supply deficit in the fourth quarter,” wrote Mohr in a price index report. “Prices remain exceptionally profitable, yielding a 60 percent profit margin over average world break-even costs including depreciation.”
As for coking coal, used in steel production, Mohr said prices, which have eased over the past few weeks as credit markets tightened in China and fears grew over the global economy, would likely drop further in early 2012. By the second quarter, however, prices should level out and start to rise again.
Iron-ore prices, which have also dropped around 30 percent over the past two months, could ease further this year.
 

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