- The stock price of Taseko Mines Ltd (NYSEAMERICAN: TGB) increased by 11.11% during intraday trading. This is why it happened.
The stock price of Taseko Mines Ltd (NYSEAMERICAN: TGB) — a company that explores for copper, molybdenum, gold, niobium, and silver deposits and holds 75% interest in the Gibraltar mine located in British Columbia and 100% interest in Yellowhead copper project — increased by 11.11% during intraday trading as it went from a previous close of $1.80 to a day high of $2. There is no direct news from the company so it appears that external factors are at play.
One of the catalysts appears to be a report by OilPrice.com with a headline that says: “Goldman Sachs Historic Copper Shortage Loom As Prices Rocket.”
“China’s return from the LNY holiday has heralded a burst of onshore investor copper buying after the holiday season with limited inventory builds evident so far. This latter trend during a period of what should be peak surplus generation onshore, has particularly bullish implications given that the market is now on the cusp of the tightest phase in what we expect to be the largest deficit in a decade. The very low starting point for inventories at the beginning of this year has been further exacerbated by a counter seasonal stock draw so far in Q1 on a scale only seen once before in recent history (in 2004). These trends point towards a high risk of scarcity conditions over the coming months,” says the report. “In this context, the fundamental outlook for copper remains extremely bullish with no evidence that current price levels are yet stimulating softening effects to reverse both spot and forward fundamental tightening trends. We continue to forecast the largest deficit in 10 years in 2021 (327kt), followed by an open-ended phase of deficits as peak copper supply (2023/24) and a record 10-year supply gap on the horizon. To reflect the rising probability of scarcity pricing our new 3/6/12M copper targets increase to $9,200/$9,800/$10,500/t (from $8,500/9,000/10,000/t previously).”
And this means Goldman Sachs now expects copper to be trading at record highs in one year. And Citi also agreed with Goldman as they expect a supply deficit until at least 2023.
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