This prediction is welcome news for copper extractors in PNG which should see increases in revenue from the red metal following two years of bad performances.
Analysts says the spike is fueled by a pick-up in Chinese imports, which is responsible for almost 50 per cent global copper demand, as well as speculation regarding the impact of US President Elect, Donald Trump’s, $500 billion infrastructure plans on demand for the metal.
According to mining.com, Investment Bank, Evan Goldman Sachs, believes that increased demand from China will leave the market tighter than previously expected, which will support a more "bullish" environment for the metal at least to mid-2017.
They predict prices to hit $6,200 (K 18,600) a tonne over the next six months and has lifted its 3, 6 and 12-month forecasts to $5,800 (K17, 400), $6,200 and $5,600 (K16, 800) a tonne, respectively from $5,000 (K15, 000), $4,800 (L14, 400) and $4,800.
"Although it is tempting to blame this on speculative positioning, the materially stronger fundamental developments that contributed to this surge in speculative interest are likely to underpin a more bullish environment for copper," Goldman analysts wrote in early December.
Molly Shutt, commodities analyst at BMI Research, says BMI has revised up its 2017 expected price to $5,150 (K15, 400) a tonne from $4,900 (K15, 400) a tonne, thanks to strong Chinese demand growth that will tighten the market faster than previously expected.
Copper project operations in PNG, such as Ok Tedi, may look forward to the prediction made.
The Ok Tedi mine, which reopened at the start of 2016 following the severe El Nino Drought forcing operations to stop, performed well with K150 million dividend payment made to the state. The spike in the copper price and predicted year will follow through from last years success with increased revenue.
The Wafi Golpu Copper and Gold project, is still in the pipeline with a Special Mining Lease (SML) awaiting to be approved.
The Panguna copper and gold mine, is yet to be deliberated on, however is one of the significant copper, gold and silver resource areas with an estimated K153 billion in reserves remaining. LoopPNG