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Dalmatian929
New Member
15 Posts |
 Posted - 02/17/2010 : 10:31:51
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Thoughts on this???
Copper Prices in for a 'Massive Correction': Commodities Pro
Published: Tuesday, 16 Feb 2010 | 6:59 PM ET Text Size By: JeeYeon Park
CNBC News Associate
The price of copper has risen almost 98 percent over the past year and currently trades above $3 a pound. David Threlkeld, president of Resolved Inc., discussed whether copper prices constitute a bubble about to burst—and threaten the global recovery.
“Copper is in overproduction,” Threlkeld told CNBC.
“Last year, consumption collapsed, so there was a huge increase in world inventories…and in order to keep the price going up, speculators have to buy more than the surplus of production.”
Copper prices have fallen 8 percent in the last month, and Threlkeld warned that the recent decline is just the beginning of a "massive correction."
Copper & Other Metals Prices Now
“Demand has to pick up 10 to 15 percent on a global basis,” he said. “Consumption is running at 10 to 15 percent below production—and even this year, with a recovery in consumption in Europe, we’re still running at a massive surplus because production is going up.”
Threlkeld said two-thirds of the world’s consumption was down 20 percent last year, while China’s consumption was up 10 percent.
“China produces about 4 million tons and consumes about 5 million tons a year,” he explained. “So their import requirement is about 1 million but they imported 3 million tons.”
“So who owns that 2 million tons of copper that was accumulated last year and who will buy it this year?”
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nologiks
Penny Sorter Member
83 Posts |
Posted - 02/17/2010 : 11:41:09
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I am not worried about copper prices dropping. I still buy my copper well below spot price.. Say FV of a penny :)
Prices will rise, I am not worried. |
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Kurr
1000+ Penny Miser Member
2906 Posts |
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bman
Penny Collector Member
USA
425 Posts |
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StuffGiant
New Member
USA
12 Posts |
Posted - 02/17/2010 : 21:12:17
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| My gut feeling is that China is diversifying its monetary reserves. Even if they are stockpiling and they have not consumed the copper, my guess is that they will continue to buy extra copper (and other things) for many years. In any event, we have no short term risk in sorting copper at face. If you are accumulating for the long term, the short term ups and downs don’t matter. |
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wolvesdad
1000+ Penny Miser Member
USA
2164 Posts |
Posted - 02/17/2010 : 23:47:35
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| Yeah, I don't think it will ever seriously drop below $2 a lb again. And I can easily see $10/lb copper in 10 years or less. |
"May your percentages ever increase!" |
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Fatboy
Penny Sorter Member
USA
81 Posts |
Posted - 02/18/2010 : 16:21:07
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A couple of things:
wolvesdad
1000+ Penny Miser Member
USA
1234 Posts
That is neat, and will only happen once! As you can see, it doesn't take much to amuse me.
Second thing: Didn't Japan stockpile rather large quantities of steel, copper, etc., just prior to WW II? I hope history isn't setting up to repeat it's self again.
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Gr33nday43
New Member
Uzbekistan
10 Posts |
Posted - 02/18/2010 : 16:33:17
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| It will happen soon. A bubble is forming, just like the bubble that formed when it was $4/lb. I am still bullish on copper in the long run but a correction is beginning, and will continue to get worse. The economy is not going to recover until at least 2011, which will keep prices down as well. |
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Copper Prices in for a 'Massive Correction'
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