Newmont Corporation
Newmont is the world’s largest gold mining company. In addition to gold, the company also mines copper, silver, zinc, and lead. It boasts over 31,600 employees and contractors worldwide and is the only gold company in the S&P 500. NEM stock closed Friday’s trading session at $67.33 a share and has been trading sideways year-to-date. Could this be an opportunity for investors to buy NEM stock given the rise in copper prices? Last week, the company delivered solid first-quarter financials and is on track to meet its full-year guidance.
For the quarter, the company produced 1.5 million attributable ounces of gold and 317,000 attributable gold equivalent ounces from co-products. It also reported an adjusted net income of $594 million for the quarter, an 82.2% increase year-over-year. Impressively, it ended the quarter with $5.5 billion of consolidated cash.
Home / Commodities / Commodity News / Copper is ‘the new oil’ and low inventories could push it to $20,000 per ton, analysts say
Copper is ‘the new oil’ and low inventories could push it to $20,000 per ton, analysts say
Key Points
• In a note Tuesday, Bank of America commodity strategist Michael Widmer highlighted inventories measured in tons are now at levels seen 15 years ago.
• Given the fundamental environment and the depleted inventories, Widmer said copper may spike to $13,000/t in the coming years after recently notching $10,000 for the first time in a decade.
• David Neuhauser, founder and managing director of U.S. hedge fund Livermore Partners, told CNBC that copper is “the new oil.”
The world risks “running out of copper” amid widening supply and demand deficits, according to Bank of America, and prices could hit $20,000 per metric ton.
The world risks “running out of copper” amid widening supply and demand deficits, according to Bank of America, and prices could hit $20,000 per metric ton.
Linked to that, we forecast copper market deficits, and further inventory declines, this year and next, Widmer said. With (London Metal Exchange) inventories close to the pinch-point at which time spreads can move violently, there is a risk backwardation, driven by a rally in nearby prices, may increase.
Backwardation is when an underlying asset is trading at a higher price than the futures market for that asset.
Widmer also highlighted that a rise in volatility resulting from falling inventories was not without precedent, since nickel shortages in LME warehouses in 2006/7 drove nickel prices more than 300% higher.
Given the fundamental environment and the depleted inventories, Widmer suggested that copper may spike to $13,000/t in the coming years after notching $10,000 last week for the first time in a decade.