Copper riding high but considered ready for a fall

Marketplace by Bloomberg – International Herald Tribune
BHP Billiton, the biggest mining company, spends 61 cents to produce a pound of copper and sells it for $3.15.

The market’s largest-ever profit margin is evidence that copper is headed for a record plunge, perhaps as much as 25 percent in a day, said an analyst, John Tumazos of Prudential Equity Group LLP. Copper doubled in the past year on betting by speculators, he said.

After a fivefold increase since 2001 to a record level in May, copper fell 11 percent in one week, the most ever, a sign that the rally might be over. The volatility of copper – the rate at which the price moves up or down – during the past 10 weeks was at the highest level in history, according to data compiled by Bloomberg. Prices fluctuated by 48.5 percent in the week ended May 26

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.