The attached report with seven detailed demand-supply tables summarizes our copper outlook to 2016.  We describe 13 key nations with mine output declines in 2010, 8 large consumer nations with 22% reported first half demand declines due to "under buying" in the face of good GDP growth and estimate up to 4 mmt cumulative supply shortfall to 2014.  We expect mine output growth to be small over the balance of 2010, 2011 and 2012.  The next 3 1/2 years look very, very good.  We are raising our 2011 copper price forecast to $4.25 from $3.50, 2012 to $4.50 from $4.00 and staying at $5.00 in 2013-14 and raising to $4.00 from $3.50 for 2015 onwards.  We caution that $7 to $10 copper prices are conceivable if mine mishaps, renewed Chinese buying or a U.S. recovery were to develop. 

The most timely buys this week are Teck, Xstrata, Antofagasta PLC, FCX,  Mercator Minerals, Duluth Metals, PolyMet Mining and outside of our regular coverage high grade copper deposits at Imperial Metals and Capstone Miningz with zones > 1% copper.  We emphasize less strongly this week BHP Billiton, Rio Tinto, Vale and Anglo American owing to 10% to 13% roll backs in fourth-quarter iron ore prices, although their valuations are very discounted .  We have Overweight or buy ratings on all  the copper/diversified mines we cover (Table 4).  We do not write on Ivanhoe Mines, owing to 51% ultimate state ownership in Mongolia, nor the Congo and Zambian companies owing to political risks.  There are a couple dozen attractive emerging copper producers with low grade deposits in planning, and their successes depend on permitting, lean control of construction costs, lean control of operating costs, good recoveries and avoidance of dilutive financings.