Category: Copper

And yet, Copper is still multiples of it’s price a mere 5 years ago.

Bloomberg.com
Copper fell in London, heading for the biggest quarterly decline in more than two decades, on concern that worsening financial turmoil will slow global growth and crimp demand for industrial metals.
Copper has lost 25 percent this quarter, the worst performance since at least 1986

Of course, a one week low when it’s already too high is of more interest to speculators than manufacturers, but it is interesting to see how these things are all intertwingled.

Bloomberg.com
Copper fell to a one-week low after the U.S. government’s $700 billion plan to bail out the finance industry faltered and regulators seized lender Washington Mutual Inc., raising concerns that economic growth will stall.

This can’t be good for copper prices.

from Yahoo Malaysia
A strike by Chilean mining subcontractors in its fourth day and denting output will keep state-run copper powerhouse Codelco’s Andina and Salvador divisions closed through the weekend, the firm said on Saturday.

Last week, Bloomberg.com reported:

Mexico’s copper output plunged 49 percent in January from a year earlier because of a strike at Grupo Mexico SAB’s Cananea mine, the nation’s largest producer.

This past Monday, they reported
Striking miners and other workers scuffled with rocks and sticks at Mexico’s largest copper mine, injuring nearly two dozen people, the mine’s owners and local media said Sunday.
Grupo Mexico SAB issued a statement urging government authorities to intervene after Saturday’s scuffle at the Cananea mine in the northwestern state of Sonora, where strikers tried to block other workers from entering the facility.

Copper is now at $3.90+ and still seems to be headed upwards.

This would go some distance towards explaining why copper inventories are so tight and prices so high. Hopefully the new mine in 2008 will bring some stability to the copper market.

Bloomberg.com
Chile’s state-owned Codelco, the world’s largest copper producer, said output fell 6.6 percent last year, the third straight annual drop, because of aging mines and labor protests.
Production dropped to 1.67 million metric tons from 1.78 million tons in 2006, Santiago-based Codelco said in a statement. A strike in June and July curbed output, and the amount of copper in the rock at mines declined.
Global stockpiles of the metal have tumbled this year, and copper prices have climbed 27 percent. Production will rise in 2008 with the opening of a new mine, Codelco Executive President Jose Pablo Arellano said at a news conference.

Copper may fall next week on speculation the U.S. economy is sliding into recession, reducing demand for the metal used in wires and pipes.
Maybe, but so far, it’s still hanging out in the $3 neighbourhood, a far cry from $2.50 a year ago and $0.80 5 years ago.

NASDAQ
Since copper is often used in construction, the red metal usually moves with economic news. Traders still considered the Federal Reserve’s announcement of a series of measures aimed at addressing the problems in the short-term funding markets, which could boost fuel demand. The moves were made in conjunction with many of the world’s other major central banks. The announcement came a day after the Fed announced a quarter-point reduction in its benchmark interest rate, a move that was widely criticized for not giving enough help to the markets.
With concerns over the U.S. economy, copper supplies are at a nine-month high. Data showed inventories monitored by the London Metal Exchange were at 3,675 metric tons, up 193,000 tons, its highest level since the middle of March.

For all that copper goes up slightly and down slightly, it’s still awfully expensive in terms of long term trends. Copper is back to where it was a year ago, but still more than 3 times the price it was 5 years ago (about 80 cents US).