How will copper and zinc, the metals that make Hudbay’s Flin Flon-Snow Lake operations go round, perform in 2015?
Like so much in mining, it all depends on who you ask.
Copper was selling for US$2.93 a pound on Monday, down about 13 per cent from the same time last year and lower than at any point since March.
PwC, the respected multinational professional services network, expects good, but not spectacular, things from copper.
“Copper, a widely used metal in everything from cars to electricity transmission, will always be needed to make the goods that the world’s growing population can’t live without,” reads a PwC report issued last month. “While the metal is now trading around $3 per pound, down from its record of $4.60 in early 2011, the price hasn’t bounced around as much as other commodities and is still considered high enough for many well-disciplined producers to make a profit.”
Worth more
Zinc was worth US$0.98 a pound on Monday, about nine per cent higher than a year ago. The price of zinc has remained higher in the second half of 2014 compared to the first.
Canadian miner Teck Resources expects zinc prices to rise in 2015 thanks to the closure of large zinc mines.
“The zinc market faces a deficit as operations such as MMG’s Century mine in Australia close by the Q3 of next year,” said Teck’s Greg Waller, as reported by the investor website Steel Guru.
Some other analysts are more pessimistic, expecting little from the base metals market in the New Year. They cite factors such as oversupply and continued global economic uncertainty.
What does Hudbay expect? Spokesperson Scott Brubacher says while the company uses “a variety of assumed metal price cases for internal budgeting and forecasting purposes,” no commodity price guideline is provided externally for a specific year.
“If over the course of the year commodity prices resulted in excess capital, we would decide the most appropriate use of it based on the priorities of the business,” adds Brubacher.
