By Leia Michele Toovey – Exclusive to Copper Investing News
The copper market was a little dull on Monday, as stagnancy arose from the battle of global demand fears and the summer market lull. London LME copper stocks rose 2,575 tonnes to 136,050, putting a lid on prices. However, these stocks are not particularly high; they account for less than three days of global consumption, and around 11 percent of the stocks already allocated for delivery. People are still worried about copper demand but it is difficult to determine if the lull is just a result of normal seasonal weakness. In order to be certain, we will simply have to wait until the end of the summer. If copper stocks continue to rise, then we can be almost certain the metal will struggle. On the LME, the metal was up $20 to $7,976 per tonne.
Copper is slightly up this Monday, as it was Friday, after the tumble of crude battered the metal down early last week. Lower oil usually reduces investment into commodities as the need to hedge against inflation falls. Falling equity markets also pushed copper lower. Oil did hit another low today, however, that did not seem to have much of an influence on copper. The watch should be on at the end this week, with American second quarter GDP figures due on Thursday and U.S. Institute of Supply Management manufacturing on Friday. This will give a far better inclination to exactly how healthy the metal’s second largest consumer is. If the data come back positive, that might give a boost to metals, but it may also strengthen the dollar, making metals more expensive for investors holding other currencies.
India’s copper futures rose slightly on the MCX, propelled by better U.S. housing data, but still weighed down over concerns of global demand. Analysts are still bearish on all the base metals because of the lack of demand. The benchmark August copper MCCQ8 traded at 338.80 rupees per kg, up 0.41 percent from the previous day.
Despite the hesitation in Copper, resources companies are still moving forward. Pan Australian Resources Ltd (ASX:PNA) announced today that exploration work underway in Thailand could lead to development of a new mine. An updated estimate of the mineral resource at the Puthep deposit in northern Thailand supported plans for a 10-year-plus mine project processing 10 to 12 million tonnes of ore, and producing around 50,000 tonnes of copper annually. Pan Australian’s direct share would be at least 30,000 tonnes per year. The deposit is located within a three hour drive of the company’s regional head office in Laos, where Pan Australian started mining copper and gold last April from its Phu Kham mine. A feasibility study into mining the Puthep deposit is due to be completed in the first half of 2009. Pan Australian said that this year they intend on spending up to $30 million exploring for copper and gold in Laos and Thailand.
Teal Mining has agreed to a future deal for processing copper concentrate with a Chinese-owned copper smelter currently under construction in Zambia. For this project, where Teal is set to ramp up production in 2009, they have received a letter of commitment for power supply, and approval for a final environmental impact study. The power distributor to all Zambian mines, the Copperbelt Energy Company, will supply Teal’s mine. The Environmental Council of Zambia approved Teal’s final environmental impact assessment study. The smelter agreement is with Chambishi Copper Smelter, where the Chinese government is spending $250 million to construct one of Zambia’s largest smelters. Teal has completed extensive metallurgical tests under a feasibility study which includes construction of a metallurgical plant to produce 25,000 tonnes copper metal per year. The company’s latest data showed that copper resources in the south limb of the mine totaled 51 million tonnes at a grade of 2.35 percent copper. South-African-based Teal Mining has copper, cobalt and gold interests in Zambia, Namibia and the Democratic Republic of Congo. Teal wholly owns this Konkola North Copper project, with Zambia’s state-run ZCCM-IH holding an option to purchase 20 percent of shares in the project.
