Monsters of Rock: Money flies into copper as red metal pokes its head above US$8000/t
Link copied to
That US inflation print may not be as significant as Joe Biden hopes, false dawns and all.
But subtle hints the economy is starting to look a bit brighter are working wonders for the health of copper stocks, thrust into the limelight this week after BHP’s (ASX:BHP) colossal bid for OZ Minerals (ASX:OZL).
OZ is up ever so slightly today, but crucially remains above the $25 per share price it rejected from the world’s biggest miner a few days ago.
That will keep the pressure on BHP to lift its bid, even if the Olympic Dam owner demonstrated its so-called ‘capital discipline’ when the race with Andrew Forrest for Canadian nickel explorer Noront Resources got too hot to handle last year.
Sandfire Resources (ASX:SFR) was the big mover in the major players today, rising 4.74%.
The $2 billion mid-tier copper play is up over 20% since mid-July, when copper prices hit their 2022 nadir. 29Metals (ASX:29M), similarly, is up 42% over the past 30 days.
South32 (ASX:S32), which bought a 45% share last year in the Sierra Gorda copper mine in Chile, was up 3.78% at 3.45pm AEST.
Since then they have risen steadily on burgeoning optimism about the world economy and China, where widespread pandemic related lockdowns hampered economic activity earlier this year.
It was helped by the smaller than expected US CPI print overnight, lifting 1.3% to US$8086/t.
Copper stocks have been rewarded by the market in recent times if they can demonstrate growth potential.
Austral Resources (ASX:AR1) has driven that point home today, raising $17 million at 37c a share from instos and sophisticated investors, including $1m from managing director and CEO Dan Jauncey.
Austral plans to produce ~10,000t of copper cathode, a downstream copper metal, each year over an initial four year stint from its Anthill mine in Queensland Mt Isa region.
The proceeds will be used on exploration, working capital and partial repayment of its debt facility, and comes shortly after Austral announced a string of results from its Flying Horse pit near Anthill.
Given the raising was conducted at a 17.8% discount it’s not surprising the company’s stock tanked today, but the $102 million copper miner remains 156% up year to date, a rare success story given the challenges facing base metals prices in 2022.