2012 Copper Q2 Market Trends and Outlook-2

Yet even as Rio Tinto struggles to meet shareholders' demands, it is expected to remain committed to developing its Oyu Tolgoi copper mine in Mongolia, which will produce about 8 percent of the world's total copper output once it begins production next year. Rio Tinto and other mining companies heavily invested in Mongolia have been closely monitoring the country's elections at the end of June, in which no group won a majority.feldspar crushing equipment Nonetheless, the opposition Democratic Party has expressed confidence about being able to form a ruling party, and investors will be focused on how the new government will use profits from its mineral wealth, which is estimated at $1.3 trillion.
Qatar Holding's call for better returns means that Glencore International (LSE:GLEN) continues to struggle in its $30 billion bid for Xstrata (LSE:XTA). The government of Qatar owns 11 percent of total shares in Xstrata through its investment fund, and has demanded 3.25 new Glencore shares for every Xstrata share. The current offer is for 2.8 shares.
Q3 and FY 2012 outlook
Looking ahead, many investors expect an upturn in the global economy, which in turn will drive up copper demand. So while Goldman Sachs lowered its third quarter price target to $8,000 per metric ton from $9,000 a ton, it expects the market to be balanced this year as supply tightens.copper ore beneficiation equipment
"Given continuing disappointments in the supply growth of oil and some of the key base metals, this moderate pace of world economic growth is sufficient to tighten markets during the second half of this year, creating the need for higher prices to balance supply and demand," Goldman stated.
TD Securities' head of commodity strategy, Bart Melek, is also upbeat about base metals and commodities in general. He expects "better commodity prices in the final three months of 2012 and into 2013," and believes that "the key catalysts are – a rising probability of outright US balance sheet expansion (Treasury, MBS, agency paper purchases), Chinese monetary/fiscal stimulus and the authorization of some sort of direct sovereign debt purchasing." He added that "consumption of materials associated with industrial fabrication should all improve as a result, lifting prices. Those commodities with weak supply fundamentals such as copper and palladium should benefit most."
Similar sentiment was echoed by Rio Tinto CEO Albanese, who told investors in Sydney in early May that "the next five years [are] going to be a supply story; the last five years [have] been a demand story. I am not sure the economic forecasters have cottoned on to that observation yet."dolomite mining equipment
Certainly, the government of Australia is upbeat about the outlook. The Bureau of Resources and Energy Economics expects overall natural resource exports to reach a record $209 billion for 2012 to 2013, with particularly strong copper exports rising 10 percent from current levels.
"Despite the uncertainty surrounding the outlook for some European economies, Australia's export volumes for most commodities have remained strong throughout 2011–12, while prices for many commodities have remained at elevated levels relative to historical norms," said Professor Quentin Grafton, the bureau's executive director and chief economist.