67 WALL STREET, New York - April 24, 2014 - The Wall Street Transcript has just published its Metals & Mining Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Mining Safety and Environmental Concerns - Global Iron Ore Production - Emerging Market Infrastructure Construction - Chinese Demand for Industrial Metals - Zinc Supply Deficit - Demand Growth in Zinc - Accelerated Grid Spending in China - Copper Demand in China
Companies include: Taseko Mines Ltd. (TGB), Nevsun Resources Ltd. (NSU), Imperial Metals (III.TO), Trevali (TV.TO) and many others.
In the following excerpt from the Metals & Mining Report, an expert analyst discusses the outlook for the sector for investors:
TWST: From a macro perspective, which metals are you most bullish about this year and why?
Mr. Low: I think it's probably useful to also expand the discussion beyond just 2014 to some degree. We do have a lot of volatility in all the metals. We have seen gold go from close to a $1,250/oz at the start of the year, up as high as about $1,375/oz, and then now we are back down to close to about $1,300/oz. We have seen copper start the year around $3.20 to $3.25 per pound and go as low as $2.90 per pound. And now, we are now at about $3.00 per pound or thereabouts. These are pretty big swings in a short period of time for metals. So I think we are going to continue to see a lot of the volatility throughout this year.
The key reason for that with the base metals is China, which is the major consumer of the base metals, and there are certainly doubts about what the health of its economy is looking like. Then of course the other major driver of the metals is the westernized markets, particularly the U.S., and given that most of these metals are priced in U.S. dollars, anything that happens to the U.S. dollar, including how the U.S. dollar is impacted by decisions coming out of the Federal Reserve can also effect these metals and what the pricing of them is. So I think we're going to continue to see a lot of volatility throughout 2014 in terms of metal prices.
In terms of metals that I think stand a very good chance of doing well this year, I would rank zinc at the top of that list, and it's because of what's going on on the supply side of the equation. Whenever we talk about pricing, the two major impacts are demand and supply. While demand tends to attract most of the headlines, supply is often what longer term dictates where I think a lot of these prices are going.
In the case of zinc, this is a metal that's been unloved for a long time. As a result there has been very little investment put into the industry. Due to this, there have been very few discoveries of new zinc deposits in the last couple of decades. Now we are running into the situation where mines that have been in operation for decades are finally starting to run out of reserves, and we haven't found anything to replace them, so we are potentially going to see the zinc market going into a deficit in terms of metal available on the market. So I think zinc is the one that's poised for some of the best upside.
Copper, like I was saying, is subject to the volatility and speculation regarding what's happening with China, and certainly I would expect copper prices to be quite volatile in 2014, but if you look out a couple of years, say 2016 and on, I think we are going to start to see copper also impacted by some of the same supply-side kinds of issues that zinc is currently experiencing...
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
- Basic Materials Industry
- base metals