Saturday, August 21, 2010

Credit Suisse: Brace Yourself For $10,000 Copper TNR.v, MAI.v, CZX.v,, FCX, CUU.v, RVM.v, BHP, RTP, AUY, BVN

In a Copper space we are following development of Los Azules with Minera Andes and TNR Gold lawsuit boardroom games. With every uptick in Copper price NPV of the los Azules is going up, keeping everybody involved closely watching the letigation outcome:

"Great news for all Minera Andes shareholders: according to Rob McEwen, the  company is undervalued and Los Azules represents "a huge copper deposit in Argentina". Maybe it is time to clear the property title of the project from legal claims by TNR Gold and move forward? With the looming copper shortage according to some sources, this Copper/Inflation play could become a company builder in the markets when printing presses will provide upside for all commodity plays. We did not understand why Minera Andes did not accepted the back in right by TNR Gold and lost opportunity to consolidate the project and secure a very important Escorpio IV property, where according to Minera Andes mining plan part of mining facilities supposed to be located, but Rob McEwen must has his own strategy. With this kind of presentation it will be not cheap any more to settle out of the court, but it is always better then drag such a project in litigation for years to come."

China is the name of the Commodity M&A game now, Chinese Tongling recently aquired more than 30% of Canada Zinc Metals above the market with more than 25% premium now.

Now we have Credit Swiss talking about Copper and the other base metals with upside of 30% - 100% in the coming years. Robert Friedland is pushing Green Copper with electric cars and Lithium as well:

"From all that you would expect him to bullish on the outlook for copper. He is a major bull.

Friedland pointed out that the while the world mined 585 million tonnes of copper metal from 1900 to 2008, it will need to mine 600 million tonnes of copper in the next 20 years alone, assuming 3 per cent global economic growth.

''Frankly, those of us in the business have no idea where this metal is actually going to come from,'' he told delegates.


But more importantly, Friedland reckons that the forecast need for 600 million tonnes of copper over the next 20 years not including the demand to come from the ''phenomenon'' of electric cars. He believes that hybrid cars are old news. The world will shift its car fleet over to lithium battery-powered electric over the next 20 to 30 years or so, waving goodbye to reliance on Middle East oil supplies at the same time.

Good news for those chasing lithium as the next big thing. But don't forget copper, Friedland added."

Business Insider:

Credit Suisse: Brace Yourself For $10,000 Copper

Vincent Fernando, CFA Credit Suisse's metals analyst Michael Shillaker is aiming high with his copper price estimate -- as in $10,000-per-ton high. In comparison, copper recently traded for about $7,390 per ton on the London metals exchange.

What will drive this copper spike? A Chinese economic acceleration starting at the end of 2010, and then continuing through 2011.

Metal Miner:

Looking as much at shares as metal prices, although obviously the two are linked, he says the Chinese economy will be the next catalyst for the out performance of mining shares, similar to those witnessed in 2001, 2005, 2007 and 2009. Not only will China increase demand through 2011 and into 2012 but demand “normalization” in the rest of the world will add fuel to the fire, “We still think that copper will reach $10,000 a ton by 2012 and relatively simple supply-demand analysis supports this.”

The old logo of Credit Suisse.Image via WikipediaHe's thus an uber-mining bull:

Including iron ore and coal in his discussion, Mr Shillaker predicted share prices have considerable upside potential, “We believe there is 30% upside potential to current share prices for the miners into year-end and in some cases potentially more than 100% upside over the next two to three years,” he is quoted as saying.

Metal Miner thinks, that for copper at least, Credit Suisse's view isn't that crazy:

Copper inventory has been falling for much of this year as this Reuters graph shows, even though this is usually the cyclical summer re-stocking period.


Other metals do not share the same robust fundamentals as copper so although both equity and commodity markets are showing a lot of correlation this is likely to be a temporary alignment and given some months and a return of risk appetite, those metals with the better supply-demand fundamentals such as copper, nickel and dare we say even aluminum, looking further out, will reassert themselves."

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