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Slate: Obscure Economic Indicator: The Price of Copper

Slate Obscure Economic Indicator: The Price of Copper

"Gold, which is trading today for about $467 per ounce, is the glamour metal�as an investment, as a bauble, and as a contrary economic indicator. Gold rises when people fear instability and inflation. But workaday copper, which trades for about 12 cents per ounce, is another story. After iron and aluminum, it's the "world's third most widely used metal," as the New York Mercantile Exchange notes. (It wins the bronze medal for the most used metal.) And it's a great coincident indicator. As copper's fortunes go, so goes the world economy.

Copper is a cheap, plentiful metal with lots of useful properties: It resists corrosion and is an excellent conductor of heat. As a result, it can be found in the intestines of a good chunk of the world's industrial economy."

"Right now, copper is sending a message that is being transmitted by plenty of other data, but that many analysts find difficult to digest: Despite all the tensions, despite the huge imbalances in trade and capital flows, despite all the world's apparent economic troubles, the global economy continues to grow at a steady and impressive pace."

The New York Times Copper's Recent Declines Stir Talk of Boom's End
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"FOR much of the year, copper prices climbed steadily, driven by a housing boom in the United States and demand from the rapidly industrializing economies of India and China. Supply disruptions further fed the price gains."

"But with the copper rally stuttering in recent weeks, and prices down as much as 3 percent from their October highs, some analysts and investors say they see signs that a bubble is about to burst.

"If one tries to gauge the commodity bubble over all, copper is the place to look," said Henry To, the manager of a small hedge fund, Independence Partners, which has been diversifying from equities into commodities."

The Washington Post Copper close at record on supply fears
"Copper futures surged to record levels on Friday, shooting above $2.00 a lb for the first time ever as tight supplies and inflation worries spurred heavy purchases by funds, traders said.

Supply concerns intensified a day after Chile, the world's leading copper producer, lowered its 2005 and 2006 production forecasts and raised forecasts for prices.

Chile's announcement came with global copper inventories already near historic lows. The market had brushed aside news earlier in the week that more supply would hit the market."

Forbes China to auction 20,000 tons of copper reserves to ease tight supply
"The National Development and Reform Commission (NDRC), the country's top economic planning body, said its stockpiling department - the State Reserve Bureau - will auction 20,000 tons of copper reserves on Nov 16. "

"Domestic copper prices have been rising sharply since 2003, leading to high profit margins in the copper smelting sector, and causing government concern over investment bubbles in the sector."

World Tibet Network News China announces development of major Tibet copper mine to go ahead
"Beijing has announced that it is going ahead with the development of a copper mine in Tibet which has the PRC's largest copper reserves and is the only known deposit in the region with world-class potential. Copper is vital to China's development and industrialization, but as a raw material is in very short supply."

A major proportion of the world's commercially produced copper is used by the electrical industries in building construction, telecommunications, electronics and electronic products. Copper is particularly valuable to China as it aims to establish high-tech industry bases. "

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Slate: Obscure Economic Indicator: The Price of Copper

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