Mining’s upward trajectory last week juddered as the sector fell back on the first trading day of the year suggesting investors are profit taking.
Europe’s mining sector had surged to a five-year high at the end of last week, on the back of rising copper and other base metal prices and earnings expectations also improved according to Reuters.
Copper prices rallied to a four-year high at year end to more than 30% to $7,156 a ton supported by the strength of the global economy and China demand.
Facing contract negotiations
Copper market could be facing a deficit as reported in the FT with analysts expecting it to emerge by the end of the decade along with labour contract negotiations in copper mining countries in 2018 that could affect 25% of the global mine supply, particularly if there are demands for an increased share of the wealth generated by higher copper prices in Chile and Peru.
In early trading on Tuesday, basic resources stocks weighed the most, with the sector index down 0.6%.
AngloAmerican slipped -0.29% and BHP Billiton dropped -1.61%. Rio Tinto dropped -2.09% and Randgold Resources dipped -0.05%.