The combination of better than expected U.S. durable goods data and the head of China's sovereign wealth fund stating that China's economy grew by almost 8% last quarter may offer some opportunities in the copper market.
Although these global economic indicators gave some hope about growth and demand in the world's largest economy, the uneasiness about the growth of supply has kept copper prices relatively in check due to concerns that larges quantities of supply could enter the market in 2013.
Regardless of the opinion that the copper market is on the verge of moving from a deficit to a surplus, indications from China manufacturing sector may offer some insight that demand may offset some of these surplus predictions. What I find interesting is that China still accounts for almost 40% of refined copper consumption.
I believe these three companies are positioned to benefit from any positive trend in the copper market:
Teck Resources Ltd.
Teck Resources Limited (TCK) is a diversified resource company committed to responsible mining and mineral development with major business units focused on copper, steelmaking coal, zinc and energy. Headquartered in Vancouver, almost 40% of Teck's business results from it's copper operations with the remaining business stemming primarily from coal and zinc.
According to the Teck Resources unaudited 2012 Q4 Report released on February 7, 2013, they produced a record 373,000 tonnes of copper including 103,000 tonnes in Q4 alone. With copper operations in Chile, Peru and Canada, Teck is actively exploring and assessing development opportunities for new copper deposits in the US, Canada, Chile, Mexico, Namibia, Peru, Turkey and Australia. One of the most impressive line items from their recent Q4 Report is their $2.9 billion cash position.
Southern Copper Corporation
Southern Copper Corporation (SCCO) is one of the largest integrated copper producers in the world. Southern Copper believes it has the largest copper reserves of any publicly listed company. Southern Copper is 81.3% owned by Grupo Mexico with the remaining 18.7% ownership interest held by the international investment community. Southern Copper operates mining units and metallurgical facilities in Mexico, and Peru and conduct exploration activities in Argentina, Chile, Ecuador, Mexico and Peru.
According to their unaudited 2012 Q4 Report released on January 31, 2013, they produced a record 651,801 tonnes of copper representing an increase of 50,000+ tonnes over 2011 production.
Northern Dynasty Minerals Ltd.
Northern Dynasty Minerals Limited (NAK) is also a Vancouver based mineral exploration and development company which holds indirect interests in over 600 sq. miles of mineral claims in southwest Alaska. Northern Dynasty's principal asset is a 50% interest in the Pebble Partnership, owner of the Pebble Project. The Pebble Project is an advanced-stage initiative to develop one of the world's most important mineral resources. If successful with the Pebble Project, Northern Dynasty could have 50% ownership of one of the largest copper mines in North America.