Here's why the Oz Minerals (ASX:OZL) share price is up 7% this week

Shares in the copper and gold producer are on the rise this week. Here's why.

| More on:
Miner with thumbs up at mine

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Oz Minerals Limited (ASX: OZL) share price has rallied 7.82% in the past week thanks to a rebound in copper prices.

OZ Minerals is one of the largest ASX-listed copper players, forecast to produce 120,000 to 145,000 tonnes of copper in 2021.

Copper price rises on demand optimism

Copper prices have been range bound for the past 6 months, after breaking above US$4/lb in late February.

The move above US$4/lb marked a 10-year high for the metal.

Copper prices have since been trading between lows of US$3.9/lb and highs of US$4.8/lb.

The price of copper tumbled to a 6-month low of US$3.95/lb on 19 August.

This selloff broadly coincided with the Oz Minerals share price hitting a 6-month low of $20.04.

Copper prices have since bounced back as China continues to show appetite for the metal.

According to an article featured on Mining.com, "There are also signs that the slump in prices last week is enticing consumers back to the market, while simultaneously discouraging suppliers of copper scrap from making sales."

The article quoted ratings agency S&P Global which said "Copper prices are expected to be supported by the potential for near-term supply disruptions in Chile, a recovery in ex-China demand and indications of continued Chinese government support for the economy and employment".

What's the outlook for Oz Minerals?

The Oz Minerals share price has so far been a solid performer in 2021, up 24% year-top-date.

Looking ahead, the company is looking to lift production at its key copper producing projects, Prominent Hill and Carrapateena.

According to the company's FY21 results, management confirmed its final investment decision for the shift mine expansion at Prominent Hill. This move is expected to lower operating costs and lift annual copper production by 23%.

In addition, management said that "Production at Carrapateena has continued to increase during the half year as expected. In January the Board approved the Block Cave Expansion, which replaces the lower portion of the current sub level cave footprint with a block cave to increase mine production to a proposed 12Mtpa."

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

a man sits back from his laptop computer with both hands behind his head feeling happy to see the Brambles share price moving significantly higher today
Industrials Shares

Up 39% in a year, is there more growth to come for this ASX 200 share?

IML Equity Analyst Josh Freiman shares his views on a major ASX 200 industrial stock.

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Catapult, Flight Centre, Nufarm, and Xero shares are storming higher today

These shares are having a strong session on Thursday. But why? Let's find out.

Read more »

drug capsule opening up to reveal dollar signs signifying rising asx share price
Healthcare Shares

3 ASX healthcare shares going gangbusters on Thursday

Investors are sending these ASX healthcare stocks soaring today. But why?

Read more »

A young man talks tech on his phone while looking at a laptop. A financial graph is superimposed across the image.
Share Gainers

Here are the top 10 ASX 200 shares today

The ASX 200 made it three-for-three losses in a row this Wednesday.

Read more »

A young woman wearing overalls and a yellow t-shirt kicks one leg in the air showing excitement over the latest ASX 200 shares to hit 52-week highs
Share Gainers

Why Brickworks, James Hardie, Megaport, and OFX shares are charging higher today

These shares are having a good time on hump day. But why?

Read more »

Fancy font saying top ten surrounded by gold leaf set against a dark background of glittering stars.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors endured another day of selling this Tuesday.

Read more »

Man pointing at a blue rising share price graph.
Technology Shares

Guess which ASX 300 tech stock is already up 64% in November!

The ASX 300 tech stock is surging higher this month. But why?

Read more »

A young man punches the air in delight as he reacts to great news on his mobile phone.
Share Gainers

Why ANZ, Block, Neuren, and Pilbara Minerals shares are pushing higher today

These shares are having a solid session on Tuesday. But why? Let's find out.

Read more »