Asiamet Resources Share Discussion Threads

[mr roper] 25/11/2016 09:45

[...]



Major strategic shifts lie behind the upward surge in copper

11:51 24 Nov 2016



Who really sets the copper price?

The question has been thrown into sharp relief over the past month as copper rose to US$5,613 earlier this week, its highest closing price since July 2015.

Beyond doubt, the trigger for the move was the election of Donald Trump in America. But how quickly market pundits and analysts return to a traditional narrative: in recent days the moves have all been about China.

“Copper rises as Chinese investors pile in,” wrote share price Angel in a note earlier this week. Commodities broker Marex Spectron cited positive sentiment at an industry conference in Shanghai, where talk was rife of demand growth of between 3% and 5% for next year.

Correspondingly, copper inventories tracked by the LME have declined by 35% since the end of September on withdrawals from Asian warehouses.

Why, precisely, the Asian buyers are going long is open to question. Could it be that as well as the ongoing Chinese government stimulus, that they are also going long on Trump?

If so, that would be an interesting comment from the Far East on the election of a man that is supposed to be making the world an unsafer place.

To be fair, copper had been a laggard in a commodities market that was already rising, and it was perhaps due a run anyway. Second guessing whether Trump’s pull is greater than that of the Chinese economy is perhaps academic in that context. Perhaps more significant is Trump’s decision to pull out pf the Trans-Pacific Partnership, a trade deal that it took the Obama administration a painstaking seven years to negotiate.

The Trans-Pacific Partnership excluded China, and for those who still have any faith in technocratic analysis was thus ultimately bad for China, at least in relative terms, since participants were likely to have enjoyed significant economic benefit.

The wildcard in that deal, though, was that Trump voters in the American heartlands perceived no benefits whatsoever.

Thus Trump has said he will bring jobs and industry “back on to American shores.” That will be good in the short-term for copper demand in the US. But it will be good for Chinese economic growth in general too, as it’s hard to read this decision as anything other than a reining in of an overextended US economic reach.

Accordingly, China’s regional economic muscle is likely to grow. So, buy copper, runs the thinking. Straightforward enough, but not everyone agrees.

At Commerzbank, analysts cite a report by the International Copper Study Group, an intergovernmental industry body, that has reduced its estimate for the global copper supply deficit for the year through August.

“Given that the production of copper has been further expanded in the meantime, above all in China, the global copper market is now likely to be adequately supplied,” Commerzbank wrote.

But the naysayers are now on the back foot, as money moves in to back the bulls. Thus, serious copper producers like Antofagasta PLC (LON:ANTO) have been enjoying strong share prices for some weeks now. Antofagasta’s shares have risen by 40% since the end of October.

Further down the pecking order, shares Central Asia Metals (LON:CAML), long the leading copper junior play in London, have risen by around 20%.

Other companies worth watching at a junior level are Kincora Copper (CVE:KCC), Entrée Gold (TSE:ETG), Vast Resources (LON:VAST), Asiamet Resources Limited (LON:ARS) and Tethyan Resources PLC (LON:TETH).

After the significant moves enjoyed by Solgold (LON:SOLG) earlier in the summer, the value uplift a major copper discovery can deliver has been clearly demonstrated.

How much more satisfying to deliver a similar result into a bullish copper market?

[mr roper] 25/11/2016 09:43

The BHP Billiton para's are worth noting regarding copper quality and the hunt for assets..
-----------------------------------------


Dr. Copper hints mining sector officially out of intensive care

Prices for the metal soared again Thursday to more than $5,700 a tonne

Cecilia Jamasmie | about 21 hours ago | 


Dr. Copper hints mining sector finally out of intensive care

Copper, until recently one of the worst performing commodities in the past two year, is having a great month, with prices up about 20% to more than $5,700 a tonne Thursday.

The rally, which began on the heels of Donald Trump winning in the US presidential election, has been partly based on speculation regarding the impact of the President-elect’s $500 billion infrastructure plans on demand for the metal.

It has also been fuelled by a pick-up in Chinese imports, responsible for some 49% of global copper demand, which is seen a good omen for the industry’s health.

Increased demand from China, the world’s largest copper consumer, has left the market tighter than previously expected —Goldman Sachs.

Even Goldman Sachs — usually the most pessimistic when it comes to predicting what’s in stake for copper in the short term — has changed its tone to a more positive one, FT.com reports (subs. required).

According to the publication, the investment bank believes the increased demand from China, the world’s largest copper consumer, has left the market tighter than previously expected. Now Goldman believes the market will be broadly balanced this year.

BHP Billiton (ASX:BHP), the world’s No.1 miner, and Caterpillar (NYSE:CAT), the largest heavy equipment maker, saw the recovery coming from miles away.

BHP, already the world's second-biggest listed copper miner, hiked its annual exploration spending by 29% this year, allocating nearly all its $900 million budget to finding new copper and oil deposits. The firm, who wants copper to be one of the pillars of its future growth, is already looking for more of the red metal in Chile, Peru, the US, Canada and South Australia, as well as eyeing new partnerships to boost its growth pipeline.

In the short term, however, BHP is not that optimistic. "A deficit is expected to emerge as grade declines, a rise in costs and a scarcity of high-quality future development opportunities are likely to constrain the industry’s ability to cheaply meet this demand growth," it said in its annual report.

Caterpillar, the world's No.1 heavy machinery maker, recently said it believed iron ore and copper miners would be leading the way in terms of an increase in equipment demand in the next three to five years. Currently CAT makes the most sales to the coal, copper and iron ore sectors, in that order.

Too soon, too fast

Given its widespread use in transport, electricity systems, manufacturing and construction, copper is seen as a barometer of the health of the overall global economy. While other industrial metals and steelmaking raw materials have jumped in value this year, copper is still looking healthier than just a month ago.

“Although fundamentals…for copper have improved, the speed of the recent rally leaves it open to the charge that price action has been too much, too fast,” Barclays analysts said in a note to clients earlier this week.

Dr. Copper hints mining sector finally out of intensive care

Dr. Copper hints mining sector finally out of intensive careThey believe that prices will come under pressure between now and the end of the year as the dollar strengthens ahead of an expected US interest rate increase next month.

A recent new survey of 22 investment banks and other commodity research institutions by FocusEconomics analysts and investors confirm Barclays’ perceptions, as it also called into question the sustainability of copper’s rally.

The consensus forecast for Q4 2017 is only a slight improvement over this year with a rise to $5,070 a tonne ($2.29 a pound).

Meanwhile, Chile’s Codelco, the world's No.1 copper producer, reported this week the lowest delivery premiums to the Chinese market on recent record, supporting comments made by local miners that there still a large supply of concentrate, which will continue to exceed demand in 2017.

Speculators, however, don’t seem to have gotten the memo. Likely backed by algorithm trading and supported by short sellers scrambling to cover positions, the metal continues to build on this month gains. It soared 2.8% to $5,768 a tonne on Thursday, while three-month copper prices jumped 2.3% to $5,903 per tonne.

[angus thermopyle] 24/11/2016 20:02

Was expecting to see a large sell show up after the close but nothing.

Maybe just the mm's moving it around a bit to create a market but where are those shares coming from they are selling and also lowering the ask at the same time and how many of those earlier sells today are actually buys. Confused? I am. :)

[horneblower] 24/11/2016 16:58

I'm sure ARS will have another, small fund-raiser but not for a while and above the current level.
At a guess, I would say they'll raise another million at about 4p some time in the spring.
Bring it on.

[ripplevale] 24/11/2016 16:41

Is there a placing due in ARS? Can someone provide remaining cash estimates and required funding for the next stage in developing their reserves.

[the macallan] 24/11/2016 14:23

Makes you wonder if some of your questions are being answered LM.

[littlemadam] 24/11/2016 14:21

All buys and price drops. I don't get it.
Is there a large sell order in the pipeline?

[dorset64] 24/11/2016 14:03

HB, sorry bud didn't realise they were there, as they're not under the main charts at the top of the page.

[2lb] 24/11/2016 13:44

Copper rising again , now 2.69

Predictable response from ARS - what a bizarre inverse relationship we have to our commodity price......

[angus thermopyle] 24/11/2016 13:40

That's another 190k shares in the pot for me. 720k now.

[mr roper] 24/11/2016 12:34

Might topslice a few at 80p, HB

[nick rubens] 24/11/2016 12:32

Likely climb back to 3p as TM is speaking. Always climbs when he speaks. It needs something 'extra' to get past that level again.

[horneblower] 24/11/2016 12:27

Dorset,

I'm not sure what you mean by daily/monthly trades chart.
I already show the 6 monthly and daily mid-price chart for ARS underneath the 5year and 2year charts.

Maybe you're not seeing them for some reason?

[littlemadam] 24/11/2016 12:19

I cannot be at presentation/meeting (is it Monday?). For those attending, do we know what questions we want aking, on behalf of shareholders here?
There are others with more detailed knowledge, but the points I need to ask are: How much cash does the company have right now and how much further can we go without raising more?
How did Tony"s China trip go? any solid signs of financial backers?
Can Tony guarantee no more shares issued/ further dilution.
what licences have we DEFINITELY got? why are the rest taking so long?

what was meant in the rns about"difficult times"?

[dorset64] 24/11/2016 12:16

Hi HB, a quick request from me if I may be so bold. Any chance you could add in a daily/monthly trades chart to the above ones you already have?

[horneblower] 24/11/2016 12:05

I don't have a problem with the recent RNS wording. Recent market (read copper price) conditions HAVE been challenging and still are, although they are beginning to show promise.

This is a long term play and we are in very early days with the share price. Being knocked back towards the bottom of a rising channel is not a problem. We are still witnessing rising highs and lows.

The real decisions for longer term holders is what to do when the share price reaches 4p and 6p where further resistance will show. With the possibility of 20p and 80p in a year or two's time, what to do at 6p?

Much patience required.

[okidokicoki] 24/11/2016 07:52

Angus Thermopyle hopefully here you will get back all your losses from GKP there has been some horror stories from that share and your getting in at a very good price here we selling £50 notes for a tenner here at the moment but do your own research but im sure you wont be dissapointed

[2lb] 24/11/2016 07:47

Copper still surging - generality this does not bode well for the ARS share price :-)

[mr roper] 24/11/2016 05:52

Copper price flying. Still targetting 2.7 for this leg

[angus thermopyle] 23/11/2016 20:58

Got my ticket for Monday but up at 5am Tuesday for work so hopefully it won't go on to late lol. :)

I wonder if TM is saving the heap leach news for then?

[adorling] 23/11/2016 20:33

Agree 2LB - I also believe BKM West will transform the BKM Valuation by a significant amount given the acreage and only a few drill holes to date.

[angus thermopyle] 23/11/2016 20:28

Mr R, thanks for the reply. I agree.

I feel a top up here with our proven management is a better place for what I have left.

[mr roper] 23/11/2016 20:23

Angus, no gkp. The latest vcp for the Bod is yet another red flag