# Invest in copper companies



## BREND (8 December 2007)

Lately I've been bullish about copper again, I have been investing into Freeport McMoRan (FCX) and Southern Copper (PCU) (they are two of the world's biggest copper miners), and had advised some of my friends to buy into First State Global Resources Fund. 

Subprime issues in US has pushed copper price down from $8000/ton down to $6600/ton. But something that market is not awared is that: the biggest consumer of copper is not US, but its China. 

One of the investment theme that I have been using for the past few years is that, 'buy what China is buying'. Metals like Aluminum, Copper, Zinc, Tin may look almost the same to most people, but they are found under the ground in different continents; Aluminum and zinc can be found in abundant in China, Copper is mainly found in South America, and Tin is mainly from Indonesia.

Hence I would avoid investing into Aluminum and Zinc companies since China has a lot of those minerals; but China is lacking in copper and tin.

Shanghai warehouse had reported huge decline in copper inventory consecutively for 3 weeks in a row, a sign that copper demand is not affected from subprime issue in US, and indicates that demand for copper in China is still strong.

Global economic growth will buoy the copper price, Richard Adkerson, chief executive officer of Freeport-McMoRan Copper & Gold Inc., said this week. 

``Fundamentally, the world needs copper,'' Adkerson said. Freeport is the world's second-biggest producer of the metal after Chile's state-owned Codelco.


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## So_Cynical (8 December 2007)

BREND said:


> Lately I've been bullish about copper again
> Subprime issues in US has pushed copper price down from $8000/ton down to $6600/ton. But something that market is not awared is that: the biggest consumer of copper is not US, but its China.



And when china turns the copper into what ever....whos there biggest customer?


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## BREND (9 December 2007)

So_Cynical said:


> And when china turns the copper into what ever....whos there biggest customer?




I'm not worry about that yet. It is a fact that copper price has come down too much, while demand for this metal is still strong. And new supply of copper ore is rather limited.


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## robandcoll (9 December 2007)

And when china turns the copper into what ever....whos there biggest customer?  -  *China*


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## rederob (9 December 2007)

robandcoll said:


> And when china turns the copper into what ever....whos there biggest customer?  -  *China*



Yes!
Demand in China is exceptionally robust.
Moreover. the US-centric thinkers might like to ponder the fact that US Comex copper inventories are virtually unchanged this year, and at historical lows.
The reason?
Housing demand is minimal, but commercial construction is still cruising along.
At some point - perhaps in 2009, the US housing market will start to play catch-up.
When that occurs, then we will see copper clip along to greater highs than this recent cycle as supply is not likely to satisfy demand, and the inventory build that was anticipated as a buffer simply is not happening.


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## So_Cynical (9 December 2007)

robandcoll said:


> And when china turns the copper into what ever....whos there biggest customer?  -  *China*



Oh so i c....

12 Nov 2007:SHANGHAI (Interfax-China) -- China imported a total of 204,424 tonnes of unwrought 
copper (copper cathode, copper anode and copper alloy) and semi-finished copper products 
in October this year, down 5.64% from the previous month.

Shanghai Futures Exchange (SHFE) copper plunged 3.81% on Monday 
to the lowest level since July on rising stockpiles and a pessimistic global economic outlook. 

The most traded 2008 January contract dropped below the key RMB 60,000 ($8,092.80) 
support level to close at RMB 59,650 ($8,045.59) per tonne.

"Investors are anxious about global economic growth, and a 
pessimistic outlook for the market is spreading right now, as stockpiles 
continue to increase. This has put a lot of pressure on copper prices,".

http://www.resourceinvestor.com/pebble.asp?relid=37726


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## Kauri (9 December 2007)

The Copper chart worries me a little at the moment???
Cheers
..........Kauri


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## Scuba (9 December 2007)

So_Cynical said:


> Oh so i c....
> ...edited for brevity...
> http://www.resourceinvestor.com/pebble.asp?relid=37726



Above link timestamp; By Interfax-China
12 Nov 2007 at 10:30 AM GMT-05:00

Just had to offer a few cents too... 
From the same site (Resource investor)

*Housing Slump Doesn't Worry Copper Bulls*
By Jane Louis
07 Dec 2007 at 03:16 PM GMT-05:00
follow>http://www.resourceinvestor.com/pebble.asp?relid=38573

Seems as it is here (the opinions that is), same, same there...


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## rederob (9 December 2007)

Scuba said:


> Above link timestamp; By Interfax-China
> 12 Nov 2007 at 10:30 AM GMT-05:00
> 
> Just had to offer a few cents too...
> ...



Well picked up Scuba.
So Cynical so cynically neglected the second sentence from his quoted article:


> *Copper and copper semis imports in the first 10 months hit 2.33 million tonnes, up 38.8% from last year.*



Kind of makes the lesser percentages quoted elsewhere pale into insignificance.


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## Real1ty (9 December 2007)

It also isn't just as simple as looking at LME stocks as China plays lots of "games" trying to manipulate the copper price.

You either believe in the copper story or you don't but if you are looking at buying copper miners on what LME stocks are doing, you could come unstuck.

Where as if you believe in the longer for stronger theory, then it would be a very smart move.



> Yes!
> *rederob*
> Demand in China is exceptionally robust.
> Moreover. the US-centric thinkers might like to ponder the fact that US Comex copper inventories are virtually unchanged this year, and at historical lows.
> ...




Well thought out post, it may be right it may be wrong but it's something to start to base your thoughts on.

LME prices aren't as they are manipulated by speculators and the Chinese.


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## So_Cynical (9 December 2007)

rederob said:


> Well picked up Scuba.
> So Cynical so cynically neglected the second sentence from his quoted article:



LoL fellas settle...i clearly dated the post....u cant miss it cos i put it
at the very start .....12 Nov 2007.

I didn't think that 1 month was fundamentally different from the next
i doubt that 1 month in copper makes that much difference.



So_Cynical said:


> Oh so i c....
> 
> *12 Nov 2007*:SHANGHAI (Interfax-China) -- blah blah blah


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## Scuba (9 December 2007)

So_Cynical said:


> LoL fellas settle...I clearly dated the post....u cant miss it cos I put it
> at the very start .....12 Nov 2007.
> 
> I didn't think that 1 month was fundamentally different from the next
> I doubt that 1 month in copper makes that much difference.



Hi Cynical, I was not suggesting you didn't date or make obvious where your linked story was from, I just wanted to show a contrarian view (which I found after following your link! lol)...
Regards,
Scuba


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## BSD (9 December 2007)

Copper demand is rising - fact.

New copper supply is very slow to arrive on market. Grades are falling, cost are rising and locations are getting sh!ttier. 

For interest sake, why not list a few large projects that are set to arrive in the next three years as China continues to grow their appetite by 20% per annum.

Lumwana - 180,000tn - Zambia (EQN)
Prominent Hill - 140,000tn - Australia (OXR)
Tampakan - 200,000tn - Phillipines (IRN/XTA)

Help me out please...

Apart from brownfields expansion (Olympic Dam) and Rio/Ivanhoe in Mongolia - name some large deposits soon to come on line with any significance...

The short term stuff is for belly-button staring hedgies trying to make their monthly numbers.

Most of us should set aside short term volatility - you may as well play cards. 

To make money you need to think long term and I can't see a wave of copper hitting a market that has growing demand based on basic (1st world) needs; electricity, plumbing, cars, air conditioning - simple stuff. 

The Seppo demand can remain stagnant forever - who cares?

Asia is the growth engine for the red metal. 

Energy is the other interest I hold - but that is for another thread...


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## Scuba (10 December 2007)

A bit more news from Kitco but saving you the double trip...
Surge in power capacity to raise Indian copper appetite By Reuters Friday December 7, 02:15pm


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## michael_selway (10 December 2007)

BREND said:


> Lately I've been bullish about copper again, I have been investing into Freeport McMoRan (FCX) and Southern Copper (PCU) (they are two of the world's biggest copper miners), and had advised some of my friends to buy into First State Global Resources Fund.
> 
> Subprime issues in US has pushed copper price down from $8000/ton down to $6600/ton. But something that market is not awared is that: the biggest consumer of copper is not US, but its China.
> 
> ...




Hi which Aussie copper companies do you like atm?

thx

MS

*Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS -6.8 -6.2 45.1 128.3 
DPS 0.0 0.0 0.0 26.2 *


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## ormond (10 December 2007)

Have shares in 2 Australian copper co.
One producing SRL-Straits resources,and a future producer HAV-Havilah resources.
More than happy to hold for the long term.


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## BREND (11 December 2007)

Kauri said:


> The Copper chart worries me a little at the moment???
> Cheers
> ..........Kauri




I do not see that as a concern, I see that as an opportunity instead.

Bought Mini Copper Comex Mar08 at $3.17, $3.14, $3.004 and $2.998, average price is $3.078.


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## Kauri (11 December 2007)

BREND said:


> I do not see that as a concern, I see that as an opportunity instead.
> 
> Bought Mini Copper Comex Mar08 at $3.17, $3.14, $3.004 and $2.998, average price is $3.078.




 averaging down will nearly always result in a profit... of course depending how deep your pockets are... 
is that a nightingale singing in Berkeley square???   
Cheers
.....Martin Gale


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## wayneL (11 December 2007)

Kauri said:


> averaging down will nearly always result in a profit... of course depending how deep your pockets are...
> is that a nightingale singing in Berkeley square???
> Cheers
> .....Martin Gale



Hi Martin,

Say! Didn't I see you at the roulette table one night? :


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## BREND (11 December 2007)

Kauri said:


> averaging down will nearly always result in a profit... of course depending how deep your pockets are...
> is that a nightingale singing in Berkeley square???
> Cheers
> .....Martin Gale




I don't agree. Averaging is a risky strategy, it can add on to your losses if the direction does not go in your view. 

Certainly you can't be winning if you have shorted oil since $50, and then averaging up as the oil price moves up.


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## wayneL (11 December 2007)

LOL!


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## Kauri (11 December 2007)

BREND said:


> I don't agree. Averaging is a risky strategy, it can add on to your losses if the direction does not go in your view.
> 
> Certainly you can't be winning if you have shorted oil since $50, and then averaging up as the oil price moves up.




at lasyt, a man after my own heart, _pogue muh ho-in , :blover: _
Chiiiiiiirs
............Oscar W


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## Scuba (11 December 2007)

Kauri said:


> at lasyt, a man after my own heart, _pogue muh ho-in , :blover: _
> Chiiiiiiirs
> ............Oscar W




Well, Oscar would have sais something like that now wouldn't he? LOL


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## jman2007 (11 December 2007)

Hi guys

What do you Cu-gurus think about Copperco? They have impressed with the rapid development of their flagship project, Lady Annie in QLD, and seem to have a hole host of drill ready targets in their exploration calender. Lady Annie global resource currently stands at 36.1MT at 0.9% Cu.  I believe they're currently producing at 19,000tpa and will be ramping up to 25,000tpa by mid 2008.

Thoughts?....


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