Central Asia Metals Share Discussion Threads

[dougmachin] 14/12/2023 12:58

Who the frick is the red ticker! LOL.

Anyway, with the Fed indicating 3 rate reductions in 2024, this is going back to previous highs, I would have thought and hope!

DM

[mondex] 14/12/2023 12:01

From Seeking Alpha, Avi Gilburt: Time For Copper To Shine

As the developing nations of the world endeavor to replace fossil fuels with renewables, the demand for copper is expected to increase dramatically over the next decade. But with economic stagnation in China, and concerns of an economic slowdown in much of Europe and possibly the US, copper prices have become as dull as an old penny. The price of the red metal has fallen from $4.70 per pound in March 2022 to roughly $3.70 today - a decline of about 20%.

From a fundamental perspective, there's an expected shortfall in copper supply that's likely to put significant upward pressure on prices. But soft pricing may persist for several months as production is expected to outstrip demand through the end of 2023 and 1Q2024 (Source: International Copper Study Group). From there, several industry analysts are anticipating a supply squeeze. For example, Goldman Sachs foresees a supply shortfall that will drive the price of copper to $4.50 per pound by late 2024, and to more than $6.80 per pound in 2025.

Concurring with this perspective, Max Layton, the Managing Director of Commodity Research at Citi, said he believes now is an ideal time for investors to buy as the price of copper is still muted on global recession concerns. The red metal has declined in price by approximately 26% from its all-time high of nearly $5.00, set in October 2021. According to Layton, copper could top out at $6.80 per pound by 2025, a jump that would "make oil's 2008 bull run look like child's play."

Similarly, the consulting firm McKinsey & Co. is projecting copper demand to reach 36.6 million metric tons by 2031 while total available production is expected to be about 30.1 million metric tons. But let's also be clear about something else: The world is not going to run out of copper - not for a very long time, if ever. The problem is getting copper ore out to the ground and turning it into a saleable product.

It takes on average about 16 years for a copper mine to go from initial construction to actual production. Add in lead times for exploration and permitting, and it can take far longer. For example, the largest known deposits for a development stage copper mine within the "lower 48" - the Resolution Mine in Arizona - have been under development for 26 years. This joint venture between Rio Tinto Group (RIO) and BHP Group Limited (BHP) has consumed more than $2.0 billion in capital, yet copper production will not begin for at least another 10 years.

It's perhaps ironic that the greatest opponents to the project are often the same environmental groups seeking to eliminate the use of fossil fuels while demanding massive increases in solar and wind power projects, and the replacement of gasoline-powered cars with battery-powered versions. To achieve such goals, massive amounts of copper must be produced.

Another challenge is that much of the "low-hanging fruit" of high-quality and easily accessible ore has already been picked. While there's a great abundance of copper ore around the world, most of it is lower-grade deposits that require more capital-intensive facilities to bring into production. This comes at a time when committed investment capital expenditures to develop new mining production have dropped by a startling amount over the past 12 years as shown in the chart below:

Investors also may want to question the notion that we will ever become "fossil fuel free" sometime in the foreseeable future. Is the investment community being realistic about the outlook for such an energy transition? As noted by a report from S&P Global: "The challenge of meeting net-zero emissions by 2050 will be short-circuited and remain out of reach unless significant new copper supply comes online in a timely way…"

Considering that only 3% of the world's energy is derived from wind and solar, it appears all but certain that "net zero" cannot be obtained at any time in the foreseeable future. And here's a fun fact: About 10% of the world's energy is derived from burning wood - three times wind and solar. While discussions on this topic often morph into political debates,

[bozzy_s] 14/12/2023 10:09

Nice link Lauders. Copper absolutely flying these past 2 days. At $3.90/lb CAML will be making a fortune.

[petewy] 14/12/2023 09:34

Thanks Lauders

[lauders] 14/12/2023 08:11

Noted this being shared on another forum and thought it was worth sharing here as relevant to CAML:

[scrwal] 05/12/2023 12:37

In order to meet future expected demands additional supplies are needed but even then the supply may be insufficient anyway - you can't magic the stuff out the ground.

[the count of monte_cristo] 05/12/2023 11:54

..."more concerned over the long term as new technologies risk bringing on additional supplies.”

Like what?

[zho] 01/12/2023 15:52

GoRozen have just released their 2023 Q3 summary. Well worth reading the section on copper, especially their reasons for concern over longer term prospects for the price of copper.

“We have just returned from a week of traveling in Asia, and every investor wanted to discuss copper. The overall opinion was nearly unanimous: over the short term, investors are deeply concerned about a recession; over the long term, they are consistently bullish. We have the opposite view: we are incredibly bullish over the short term but are becoming more concerned over the long term as new technologies risk bringing on additional supplies.”

[dougmachin] 01/12/2023 10:36

Cu at 3.80. Gotta be nice for the bottom line here.

[dougmachin] 29/11/2023 22:24

"It began producing copper in 2019, providing around 1% of the global copper output."

[cthompso] 29/11/2023 20:56

Cobre Panama can only be a positive for us at least...seems the dividend might be more secure than we thought.

[bozzy_s] 22/11/2023 22:47

11% at today's price if the divi is unchanged, obviously. But 8.14% if it's cut to 14p. 9.3% if it's cut to 16p. Yes Garycook that'd be great. My 14p is conservative.

I'm saying don't read anything into historic dividend yields. It's a recipe for disaster! Look at the future payouts instead. CAML is a superb company, and a big divi payer - which is why I'm here. But it won't pay the same amount in dividends in 2024 as the past two years, due to falling profits.

[spacedust] 22/11/2023 09:13

11% at today's price. The lesser the share price the higher the dividend payment. Just depends when you buy

[garycook] 22/11/2023 00:18

Bozzy. I think 16p 2024 Div,s.

[bozzy_s] 21/11/2023 19:40

I wouldn't ink in 18p spacedust. Profits and divi are falling, so I've pencilled in 14p for next year. Still a healthy 8.14% if it's cut to that level.

[spacedust] 21/11/2023 16:22

11% dividend payment. Wow better than Vodafone

[kael] 21/11/2023 15:29

Yes it's broken down trend, looking for a good weekly close.

[cthompso] 21/11/2023 06:59

Copper is still looking strong, lead too. You'd expect the price here to follow pretty soonhttps://www.scmp.com/news/china/article/3242237/china-demand-hopes-drive-copper-prices-two-month-peak

[nickarsenal64] 17/11/2023 06:08

I am no expert in commodities but note copper has risen over $100 to over $3,700 in a week. Bodes well for the future if this continues!

[glaws2] 16/11/2023 11:15

Been corrected to 171p

[yawn1971] 16/11/2023 10:11

What is that 14000 sell at 141p all about ?

[kael] 15/11/2023 12:44

Copper gearing up to attempt a break of the 2 year downtrend.

[indalo] 15/11/2023 08:11

Solid move yesterday on large volume. Any views here? Big seller cleared?

[kael] 14/11/2023 18:20

Copper making gains today on dollar weakness after the inflation print. Expecting we've seen an end to dollar strength for a fair while, metals and minera could do v well.