RBC RBC Capital Markets analyst Sam Crittenden surveyed a weakening base metals complex,
“Our view: Copper fell to 3-month lows over the past week as a lack of stimulus following China’s Third Plenum meeting and still mixed near-term demand weighed on prices. The Peoples’ Bank of China announced a 10bps rate cut this morning to both the 1Y and 5Y benchmarks which may provide a minor uptick in sentiment, but further stimulus is likely needed to address the weak economic recovery and support the languishing property and construction sector. We are seeing the copper import premium in China moving higher ($16/t vs. $10/t w/w) and Shanghai inventories moving lower (-2% w/w), both key indicators that physical demand is directionally improving. Earnings kick off this week with Freeport tomorrow before market open, First Quantum tomorrow after market, and Teck Wednesday morning. We expect Freeport’s results to be straightforward following pre-released guidance cuts. On First Quantum, we are looking for consistent production out of Zambia, but expect a greater focus on commentary regarding Cobre Panama. On Teck, we will be watching for incremental production improvements at QB2″
Mr. Crittenden has outperform ratings on Solaris Resources Inc., Arizona Sonoran Copper, Teck Resources, First Quantum Minerals, Hudbay Minerals Inc., Champion Iron Ltd., Ivanhoe Mines Ltd., Capstone Copper Corp., Major Drilling Group Int., Filo Corp., Marimaca Copper Corp., and Capstone Mining Corp.