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High Copper Prices Drive Imperial's Impressive Quarter

|Includes: COPX, CU, CUP, DBB, Imperial Metals Corp. (IPMLF), JJC, JJCC

Copper has been in the news for all the right reasons from an investment point of view. Supply shortages have been a major factor behind the surge in copper prices due to a combination of falling ore grades in major producing nations, labor problems and project delays. Higher copper price outlook is not just helping investors and traders unleash some wealth creating opportunities but is also driving mining majors as Canadian miner Imperial Metals Corporation (OTCPK:IPMLF) posted better third-quarter results, helped mainly by higher copper prices. 

Imperial Metals Quarter Results: Canada based, Imperial Metals Corporation's (OTCPK:IPMLF) results for the July-September quarter, net income was C$7.1 million, or 19 Canadian cents a share, up from C$4.6 million or 14 Canadian cents a share a year ago. On an adjusted basis, the company earned 35 Canadian cents a share. Revenue rose 28 percent to C$68.7 million. Copper price increased during the quarter, resulting in a positive revenue adjustment of C$8.8 million. Meanwhile the company's shares have gained 55 percent in value since operations at its Huckleberry mine in northern British Columbia resumed in August, after being halted a week earlier.  They were down 13 Canadian cents at C$24.26 in early morning trade on Monday on the Toronto Stock Exchange.  

LME: Benchmark copper prices on the London Metal Exchange hit a record high of $8,966 on November 11, a gain of more than 45 percent since early June when markets were fretting about Greece and sovereign default in euro zone countries.


Copper Outlook 2010 And Beyond

Long Term Upside: Despite some near term weakness with respect to Chinese demand, the overall physical fundamentals for the copper market appear very strong. In fact Thomson Reuters has quoted Hermes Fund Managers as saying that copper prices are set to hit new records over coming years as supply shortages meet strong demand from developing market consumers and investors seeking safety in hard assets.

Base Metals Projections: World Market Pulse analysts believe that new investor interest in products such as commodities exchange-traded funds will also boost base metals demand and prices from 2010 until 2015. Analysts at consultancy CRU Group are also bullish as evident from its 2014 against 2010 commodity price performance forecast thermometer, CRU sees gains of 15 percent or more for copper and tin. During this same period, the group also sees 0-15 percent gains for lead, zinc and aluminium, and 0-10 percent for nickel.

Copper ETFs Investment Options include: Copper ETFs

ISE Global Copper Index Fund Profile (NASDAQ:CU): The index is a modified linear weighted index designed to track public companies that are active in the copper mining industry based on analysis of revenue derived from the sale of copper.

Expense Ratio: 0.70%

iPath DJ-UBS Copper Total Return Sub-IndexSM ETN (NYSEARCA:JJC): The index includes the contract in the Dow Jones-UBS Commodity Index Total Return that relates to a single commodity, copper (currently the Copper High Grade futures contract traded on the COMEX).

Expense Ratio: 0.75%

PowerShares DB Base Metals Fund (NYSEARCA:DBB): The Index is a rules-based index composed of futures contracts on some of the most liquid and widely used base metals - aluminum, zinc and copper (grade A). The index is intended to reflect the performance of the industrial metals sector.

Expense Ratio: 0.75%



Disclosure: No Positions