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.
Image source: Getty Images
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."
