Copper miner OZ Minerals Ltd [ASX:OZL] has been a strong performer throughout the COVID-19 pandemic.
The OZL share price has pushed higher again on the back of strong quarterly results.
Copper is a commodity that can be a good indicator of broader economic activity.
As an industrial metal, copper is used in a variety of applications in manufacturing, electronics and construction.
It is typically considered cyclical. Meaning prices go up when the economy is good, and down when the economy slows.
With some analysts now arguing the stock market has become detached from the ‘real economy’, what can the OZL share price tell us?
Upon its latest report, OZL shares are up 50 cents or 3.85% to trade at $13.48 per share, its highest price since mid-2011.
Virus or not we still need stuff
OZL have seemingly adjusted well to operating under COVID-19 conditions in Australia and Brazil.
The company improved total copper and gold production from the previous quarter, leading to upgrades in FY2020 guidance levels.
Source: OZ Minerals
The price of copper has recovered strongly since the market crash in March.
The metal has now moved past its pre-crash high.
Source: Trading Economics
Two of the world’s largest importers of copper, China and India, are pulling themselves out of the lockdown mess — with manufacturing almost back to pre-coronavirus levels.
Discover five ASX-listed firms that have been beaten down during the crisis with the potential to rally strongly as the market recovers. Click here to learn more.
Source: Trading Economics
Interestingly, we have not seen the same price increase in iron ore.
Which is down about 6% over the last 12 months.
This is despite low global production levels, thanks to closure of a mine in Brazil and potential supply disruptions form an uptick in demand from China.
On the other hand, fears surrounding the supply of copper (thanks to the world’s largest producer, Chile, being locked down) have spurred on copper prices.
The Aussie dollar is a good indicator of global economic sentiment.
Demand of our dollar is high is because people want to buy our commodities.
The V-shaped recovery of the copper price is almost as if the virus never happened.
Though OZL has not released sales figures today, the miner said they were uninterrupted during the June quarter.
A good sign on the path to economic recovery.
Financial markets veteran, Greg Canavan reveals the critical factors that affect the rise or fall of the Aussie dollar. Understanding where it’s headed will allow you to adjust your investment strategy early for optimal performance. Click here to download your free copy of ‘Will the Aussie Dollar Enjoy a Post-Pandemic Resurgence?’ to discover where the Aussie dollar could head towards the end of 2020.
The Rum Rebellion