F E AT U R E D
— ANALYSIS — WITH REGINA MEANI Building on 2021 THERE IS NO question that 2021 was a challenging year, but it did provide some opportunities within our mining community. Reflecting on past columns from 2021, we would like to highlight some stocks and commodities to keep in our sights and to build on for 2022. Our copper report from the August 2021 issue underlined that the metal had long been perceived as the bellwether for individual countries and for the wider global economy. In the July/August period and further into 2021 we suggested that the price was experiencing a similar style corrective phase to 2004-2005. As we enter 2022 the price has been preparing for another test of its previous limits in the $US4.50-$US4.70/pound area, with a push through triggering a more substantial rise for the metal. In the same article, we analysed OZ
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Minerals trading at $21.60 and BHP when it was at $49.48. OZ Minerals (ASX: OZL) is Australia’s third largest copper producer operating globally, with headquarters in South Australia. The share price for OZL closely mimics copper’s performance and in the July/August period it too was experiencing a corrective phase. In December, OZL’s share price showed the potential to test its $30-40 peak zone from 2007-2008. Momentum is becoming squeezed and suggests that while the price may approach and push into $30 and beyond, a sustainable breakthrough may be delayed by price volatility. Looking at BHP (ASX: BHP), Australia’s largest copper producer, we find that in the months since our copper analysis in August, the company’s share price had suffered somewhat.
Iron ore prices declined during the period and the oil price sold off in November. As we move into 2022, we find that both commodities have turned and rallied throughout December with BHP in tandem. In mid-August 2021, BHP’s price broke down from its early-2021 highs when the price fell below $45, triggering a deeper corrective phase. From late September into midNovember, the stock experienced multiple turning points above $35 before a push in December boosted the price above $40. In a similar fashion to OZL, BHP’s price is heading into its $45-55 barrier zone and may need to pause and consolidate its position before a maintainable rise through the area can be supported. Once clear of the barrier zone, longerterm objectives will come into play towards $65 and potentially $85.
