By Charles Kubach - Mine-Engineer.Com
February 2, 2016
Copper in 2016
Over production, low metal prices, low demand have all contributed to a "recession" in many metals, such as iron ore, aluminum, copper, zinc and lead.
Metal Prices, Feb. 2, 2016
In the table above are prices, as of 2 February 2016. Of all the metals, perhaps copper is best situated for a improvement in prices in the year ahead. For one, there are not massive stockpiles of copper, like there are of iron ore, aluminum, zinc & lead. If copper miners do not overproduce, the prices should gradually increase with improving manufacturing and construction, because as the existing supplies dwindle, more will be required at the current market rate.
China, as always nowadays, is the big question mark, as they release economic statistics that no one believes, and most in the business wonder what the condition of their economy actually is. One thing for certain, it has been contracting the last few years, and with the plants closing and workers roaming the streets of industrial cities, the economy is certainly not expanding at 6.9% as the government states. This causes a lack of confidence in any government statistics released by China and investors, and mine operators are simply guessing how bad it really is. If the Chinese economy stabilizes this year it will be good for mining, as the prices will stop free falling, and mines may actually see the light at the end of the tunnel.
Copper used to be a leading indicator of economic health, because manufacturing of electronics, and building and construction industries use a lot of copper when they are active, producing electronic products, housing and buildings.
Gold is hanging on, due to the overpriced stocks and low yielding interest rates. At least half of the "value" in stocks is false value, created by the Fed's "Free Money", and this has created, what many are starting to recognize, as a very over priced equities market. Some have ventured back into holding gold, sensing trouble ahead, and gold is currently around the $1,100/ounce range, which makes it attractive to buy. So, in my opinion, gold will rebound to around $1,300/ounce, and copper may actually increase 10% to 20% this year. As for the rest of the metals, the huge stockpiles do not bode well for economic improvement in 2016.
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