Insights

Why the Oz Minerals (ASX:OZL) share price, up 61% this year, could run higher

Many investors shy away from ASX shares following a run of strong gains. Here’s why the Oz Minerals share price could run higher.
The post Why the Oz Minerals (ASX:OZL) share price, up 61% this year, could run higher appeared first on Motley Fool Australia. –

A happy miner tips his hard hat, indicating good ashare price results for ASX mining stocks

Shareholders of OZ Minerals Limited (ASX: OZL) can look back on a highly profitable 2020, so far. Despite plummeting 41% in the pandemic-driven market rout earlier this year, the OZ Minerals share price is up 61% since 2 January.

In comparison, the broader S&P/ASX 200 Index (ASX: XJO) is down 1.5% year-to-date.

The OZ Minerals share price action since the 23 March lows has been stellar, with the miner trading up 184% from those lows. And despite the strong share price gains Oz Minerals has already booked, there could be more ahead.

That’s because OZ Minerals’ owes much of its good fortune to the soaring price of copper, its primary focus. And as with most miners, its share price tends to rise (and fall) significantly more than the price of the metals it digs from the ground. Which is why you’ll often hear that miners are ‘leveraged’ to the price of their metals.

Copper, not coincidentally, also bottomed out on 23 March at US$4,630 (AU$6,300) per ton. At time of writing, it’s trading for US$7,694 per ton, a price increase of 66%.

That’s a 7-year high for copper. But many market veterans are thinking back further, to 2011 when copper fetched more than US$10,000 per ton.

We’ll look at why below, but first…

What does OZ Minerals do?

Based in South Australia, OZ Minerals is mining company primarily focused on copper. It owns and operates the high-quality Prominent Hill copper-gold mine and the Carrapateena advanced exploration copper-gold project. Both sites are located in South Australia.

OZ Minerals also has extensive operations in Brazil and an exploration project in Sweden.

Why copper – and the OZ Minerals share price – could run higher

A boom in expected government infrastructure spending and even larger forecast growth into green energy stimulus spending are both touted as supporting higher copper prices. The highly conductive metal is used in building construction and a core component of batteries.

Mark Hansen is the chief executive of London-based metals trading house Concord Resources Ltd. As reported by Bloomberg, Hansen says:

We’re in an unprecedented situation as there’s more money than ever before sitting around looking for something to do. Copper may not have had an investment theme with the potential of ‘green’ applications since the demand-driven bull market 10 years ago.

Copper market veteran David Lilley, founder of hedge fund, Drakewood Capital Management, adds:

The world is re-engineering transportation, power generation, information storage and goods distribution… Governments across the world are supporting and encouraging the transition. The consequences for metals demand are exciting.

The OZ Minerals share price is up 2.05% at $16.94 in afternoon trading.

Looking For Bargain Buys? These Cheap Stocks Could Be Just What You’re After (FREE REPORT)

Scott Phillips has released a FREE stock report revealing 5 stocks that he believes are WAY undervalued by the market at these current prices.

Scott thinks these 5 stocks are a ‘must consider’ for any savvy investor.

Don’t miss out! Simply click the link below to grab your free copy and discover Scott’s 5 bargain stocks now.

Click Here For Your Free Stock Report

More reading

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why the Oz Minerals (ASX:OZL) share price, up 61% this year, could run higher appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!