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Copper, Discussion
thekiwi
post Posted: Oct 14 2004, 09:25 AM
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Metals Stocks Sink As Copper Plunges
10.13.2004, 05:42 PM

Metal stocks sunk Wednesday, as mining companies were downgraded, copper prices crashed after hitting a 15-year high last week, and metal futures followed gold prices, which hit a two-week low on a strengthening dollar.

Shares of Freeport McMoRan Copper & Gold Inc. fell more than 8 percent to $36.40 on the New York Stock Exchange after Prudential Financial lowered the mining company's rating to "Neutral Weight" from "Overweight" and cut its target price to $44 from $49 per share. Prudential analysts explained that gross margins at the company's Atlantic Copper producer in Spain may be lower than expected, and mining royalties are likely to be higher.

Copper miner Phelps Dodge Corp. shares fell more than 9 percent to close at $83.10 on the NYSE after Prudential's analysts lowered their price target to $156 from $161.

"Metal prices have been on quite a tear in the past three to four weeks, and they became overextended," said Ron Coll, an analyst with Jennings Capital in Toronto, adding that the recent price drops were largely driven by investor speculation. "There is an element of trader speculation, not just old-fashioned supply and demand," he said.

However, the International Copper Study Group on Tuesday had warned that China consumed 20 percent less copper in July, and metals giant BHP Billiton PLC on Wednesday announced that worldwide supply of copper will outpace demand in the second half of 2005.

December copper futures fell 16 cents to close at $1.288 per pound after hitting $1.27 earlier in the day on the Comex division of the New York Mercantile Exchange. Copper hit a 15-year high of $1.48 per pound Friday. Also on the Comex, December gold futures fell $2 to $414.60 per ounce after hitting $410.80 early in the day.

On the London Metal Exchange, three-month copper futures fell 9 percent Wednesday - the largest one-day drop since May 1996 when scandal shocked the market. In after-hours trade, copper fell further to a five-week low of $2,722.50 per ton.

Also on the London exchange, three-month nickel futures closed down 16 percent, hitting a thirteen-week low of $13,000 per ton, and lead, zinc and tin finished the day down 5 percent to 7 percent.

Other stock decliners in the sector include Inco Ltd., whose shares fell nearly 6 percent to close at $35.26 on the NYSE after UBS on Wednesday downgraded the Canadian nickel miner to "Reduce" from "Neutral," and Prudential on Tuesday reduced the stock to "Underweight" from "Neutral Weight."

Coeur d'Alene Mines Corp. shares closed down 15 cents, or almost 3 percent to $4.99 on the American Stock Exchange.

Aluminum producer Alcoa Inc. saw shares decline $1, or 3 percent, to $32.19 on the NYSE, and BHP Billiton shares sank $1.04, or almost 5 percent, to $20.40 on the NYSE



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The Kiwi
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tastarga
post Posted: Oct 11 2004, 08:52 AM
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In reply to: thekiwi on Monday 11/10/04 07:39am

the kiwi,
strikes in Chile have been comparatively short lived over the past decade. On this basis they should be back at work within the next week or so-however it does highlight the fragile nature of the supply side in the copper market.
There are only a few mines of any significance due to come onstream in the next five years (including the mighty OX in Sepon), against a backdrop of increasing global demand-not just China !,coupled with a decline in the average grade of the world's major mines.
The copper price could expect further gains this week, with a pause when the Chileans pick up their shovels again, then another run up pre Xmas (?).
Of course if the boys go against the trend and stay out on strike, well, it is the world's biggest copper producer and there is b*gger all in the warehouses =pick your price between US$1.50 and US$2.00 lb!!!
Cheers,TAS
(Be very agile if you want to short BHP/RIO/WMR/OXR in the meantime )

 
thekiwi
post Posted: Oct 11 2004, 07:39 AM
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Copper keeps increasing internationally, and has certainly broken out of its channel.
Recently closed at US 1.4848 /lb

Copper ¬ Oct 08, 14:47
Bid/Ask 1.4848 - 1.4893
Change 0.0000 0.00%
Low/High 1.4848 - 1.4893

http://www.telegraphindia.com/1041009/asp/...ory_3860896.asp

Codelco strike fuels copper spurt

London, Oct. 8 (Bloomberg): Copper prices rose to a 15-year high in London as a strike shut a smelter owned by Chile’s Codelco, the world’s biggest producer, threatening to worsen this year’s shortfall in global supplies.

The Chuquicamata Smelter, run by the Codelco Norte division, was closed and a strike by supervisors will last until a new labour agreement is reached, union official Mario Sepulveda said.

Copper, used by companies such as Nexans SA to make electrical wiring, has climbed 14 per cent since September 3 amid dwindling inventories.

Copper for delivery in three months reached $3,085 a metric tonne on the London Metal Exchange (LME), the highest since March 13, 1989.

Commodity prices are at the highest in two decades as oil and metals producers struggle to expand output. Barclays Capital estimates that hedge funds, investment vehicles for the wealthy, account for about half of LME trading, attracted by higher returns than from stocks and bonds.



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The Kiwi
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happychappy
post Posted: Oct 9 2004, 11:03 AM
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Copper up 33% for the year,

but most Aussie explorers with advanced copper projects are looking a bit of a yawn as far as SP goes. How long can this keep going - either copper price will plummet back to where it was, or SP's of junior copper companies will have to rise.

The copper gains are not quite as spectacular as those of nickel, but it does suggest we could see some copper companies getting a jolly good lift in their share prices once people re-calculate the numbers on their projects with a higher copper price.


R/happy



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toilet
post Posted: Oct 9 2004, 10:46 AM
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http://quote.bloomberg.com/apps/news?pid=1...r=latin_america

something about the copper supply shortages....

 
dali
post Posted: Oct 9 2004, 12:27 AM
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www.kitcometals.com has a lot of green plusses. Hope it transfers into some of my favourites next week. This wave is building nicely. wub.gif

 

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PeterH
post Posted: Oct 7 2004, 03:17 PM
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In reply to: thekiwi on Thursday 07/10/04 08:49am

I can see that the Ferret is right up on the laws of supply and demand and the workings of the free market.

One would think from reading that piece that the Chinese had brought the Chilean copper deposit into existence just by buying it.

cool.gif

 
thekiwi
post Posted: Oct 7 2004, 08:49 AM
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A Snippet from "Around the Traps" by The Ferret:

QUOTE
The local resource companies had better watch out.

The Chinese may not be such big customers in the future.

They're starting to buy the mines themselves.

They're spending up big to ensure stable raw materials supplies.

Our Spanish-speaking staff member picked this up on one of the
Spanish news services.

Apparently Chinese state-owned corporation Minmetals Nonferrous
Metals Co has purchased two copper mines in Northern Chile for $US5
billion - Dona Ines de Collahuasi and Lomas Bayas, formerly owned by the
Canadian Noranda group.

As well, advanced talks have been reported between the Chinese
and officials of the Chilean Copper Corporation, Codelco.

China consumes almost 20 per cent of world's production.




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The Kiwi
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thekiwi
post Posted: Oct 7 2004, 04:53 AM
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Copper Rises to 6-Month High in London on Stocks, Spain Strike
Oct. 6 (Bloomberg) -- Copper futures rose to a six-month high in London as stockpiles shrank and a strike at Atlantic Copper SA's smelter in Spain cut output of the metal used to make power cables and water pipes.

Inventories at warehouses monitored by the London Metal Exchange have fallen 4.8 percent in the past two days to 95,350 metric tons, less than two days' global demand. Workers at Atlantic, which last year produced 247,000 tons of finished copper, yesterday held the first of four one-day strikes planned for this month to protest 75 job cuts.

Copper is ``taking its cue from the stocks trend and ongoing supply problems in Spain,'' Robin Bhar, an analyst at Standard Bank in London, said in an e-mailed report.

Copper for delivery in three months rose $22, or 0.7 percent, to $3,001 a metric ton on the LME at 8:26 a.m., higher than any closing price since April 1. Copper's closing of $3,030 on March 1 was its highest in eight years.

Codelco, the world's biggest copper producer, may face a strike as soon as Oct. 8 by supervisors at its largest division who want improved benefits. The strike deadline was extended from yesterday at the Chilean company's request, union Treasurer Mario Sepulveda said.

The Codelco Norte division accounted for 53 percent of Codelco's copper output in the first half. A strike would reduce production at its smelter and hinder detonations that break up rock.

China's Demand

Copper has climbed 64 percent in the past year on surging demand from China, the world's biggest consumer of the metal. China, the fastest-growing of the world's 20 largest economies, uses about 30 percent of the copper it imports to make power cables needed to feed the country's demand for electricity.

Copper for December closed Sept. 30 on the Shanghai Futures Exchange at 29,180 yuan ($3,526) a ton. The exchange, where copper and aluminum trade, was shut today for China's three-day national holiday.

A copper deficit is forecast through at least next year. Global demand will grow 63 percent this year to 16.4 million tons, exceeding production by 428,000 tons, Goldman Sachs JBWere Pty said last month. Copper prices will average $2,838 a ton for the year, 38 percent more than in 2003, Bloomsbury Minerals Economics Ltd. said yesterday.

LME inventories may slump as low as 40,000 tons before expansion and new projects by companies including BHP Billiton create a surplus, the London-based consulting company said.

Other metals rose on the LME. Aluminum was up $2 to $1,835 a ton, nickel climbed $200 to $15,800 and zinc added $12 to $1,134. Lead rose $8 to $933 and tin jumped $30 to $9,080.




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The Kiwi
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thekiwi
post Posted: Oct 7 2004, 04:27 AM
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http://quote.bloomberg.com/apps/news?pid=1...r=latin_america

From Blomberg approx. 10 hrs ago ... before last nights trading ...

Copper Near 9-Year High in New York as Exchange Stockpiles Fall
Oct. 6 (Bloomberg) -- Copper futures in New York traded near a nine-year high after global stockpiles monitored by the London Metal Exchange fell for the 10th day in 11.

Stockpiles monitored by the exchange have dropped 83 percent in the past year because of lower supply from the world's two biggest copper mines, in Indonesia and Chile, and rising demand in China and the U.S. Chinese copper demand may rise 16 percent next year according to Sumitomo Metal Mining Co., Japan's third- largest copper producer.

``The outlook still appears bullish for metals, with low inventories and tight supply continuing to dominate proceedings,'' Martin Mayne, an associate director of client sales at N.M. Rothschild & Sons Ltd., said in an e-mailed report from Sydney.

Copper for December delivery on the Comex division of the New York Mercantile Exchange fell 0.15 cent to $1.40 a pound in after-hours trading at 3:18 p.m. Sydney time.

The contract rose 0.3 percent yesterday to $1.4015. On Oct. 1, copper rose to $1.404 a pound, the highest closing price for a most active contract since August 1995.

Inventories monitored by the London exchange fell 2,525 tons, or 2.5 percent, to 97,625 tons, the exchange said yesterday. Escondida in Chile, the world's biggest copper mine, and Grasberg in Indonesia, the second-biggest, are both expected to produce less of the metal this year.

Copper for delivery in three months on the London Metal Exchange was bid at $2,994 a metric ton and offered at $2,998 at 3:42 p.m. Sydney time, compared with yesterday's closing price of $2,979 a ton.




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Cheers

The Kiwi
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