Emerging copper producers were among the worst performers today even as the price of the red metal rebounded from a multi-year low.
Copper inched up 0.4% to $US304.30 a pound in late afternoon trade after hitting its lowest point since at least 2010 as worries about a sharper than expected slowdown in the all-important Chinese economy followed disappointing trade data from the country over the weekend.
China posted a trade deficit of $US23 billion ($25 billion) in February when the market was expecting a surplus of around $US15 billion.
While the news has put the spotlight on the iron ore price, which has fallen into what market watchers call a “bear market” (defined as a more than 20% fall from the peak), copper has also suffered on worries of waning Chinese demand.
Copper is down around 10% this year and is weighing down stocks like Tiger Resources (TGS) and Altona Mining (AOH) even though they are among the lower cost producers in the world. Altona has a cash cost of around $US1.68 a pound and Tiger can produce at a little over $US1 per pound.
This isn’t enough to save the stocks though. Altona shed 1 cent to 15.5 cents, its lowest this calendar year; while Tiger gave up 1.5 cents to 40.5 cents and has now recorded its fourth consecutive day of losses since hitting a two-year high of 45 cents last week.
The correction could be seen as a buying opportunity. The fact is, even if the price of copper were to stay around the $US3 a pound mark, the stocks are still looking cheap. Further, both miners do not have funding issues and are already profitable.