TSX Commentary

Copper Market Outlook — First Quarter 2010
Overall global copper demand remains weak. China has been the only source of increased demand thus far. Restocking has been a significant component of increased Chinese offtake. As China’s restocking process comes to an end, an increase in demand outside China will be required to prevent renewed weakness in global demand. RBC CM estimates that the global copper market recorded a surplus of 231,000 tonnes in 2009. Reduced supply, together with strong Chinese offtake, limited the market surplus. In the near-term, the market remains in surplus and inventories continue to rise. However, RBC CM forecasted rebound in demand should result in balanced to deficit markets beginning in 2010. RBC CM expects refined production to remain constrained by mine supply and inventories to decline significthroughout the forecast period as a result, supporting historically strong pricing.
The underlying fundamentals of the copper market remain very positive. The copper market remains much tighter than the other base metals. RBC CM forecasts an average price of $3.00/lb in 2010, $3.25/lb in 2011, $3.50/lb in 2012 and $3.75/lb in 2013. The long-term price forecast is $1.75/lb in 2009 U.S. dollars.