A case for copper?

[oz_canuck]

All of the alternative energy sources provided in the above post requires one thing to convert an energy source to electricity......... Generators!!!!!.... And what are Generators made out of.... Copper!!!! Yeehawww..... Sorry got excited about remembering something out of Year 8 Physics
Anyhow I believe the initiator of this post is onto something here... IMO as the world requires more energy (not just clean energy) it will require significant amounts of copper. i do not see too much recycling as current energy sources will be required to keep their current Generators online to satisfy existing demand.
BTW - There is an interesting Copper and Base Metal play on the ASX targeting India. The stock symbol is IRL

Cheers

 

[rederob]

BTW - There is an interesting Copper and Base Metal play on the ASX targeting India. The stock symbol is IRL

Cheers

MI 10 Jan 2008: Australian-listed India Resources, which is reactivating Hindustan Copper’s former Surda mine in the eastern state of Jharkhand, said it has shipped the first concentrates to Hindustan Copper’s nearby Moubhandar smelter.
Mining re-started in November at Surda, which had been previously out of action since 2003.
9
The smelter has a capacity of 18,000tpy of copper and India Resources said its intention is to meet 25% of the plant’s concentrates requirements by June of this year and ultimately lift that percentage to 50%.

Fell foul of the 100 character rule again!

 

[Joe Blow]

Fell foul of the 100 character rule again!

There is no 100 character minimum rule outside of the three stock forums (A-H), (I-P) and (Q-Z). In all other forums there is a three character minimum, although keep in mind this does not include quoted text.

 

[rederob]

There is no 100 character minimum rule outside of the three stock forums (A-H), (I-P) and (Q-Z). In all other forums there is a three character minimum, although keep in mind this does not include quoted text.

Thanks Joe
But it rejected the first time I tried to post because of the said rule - perhaps a glitch

 

[doctorj]

FYI, outside of the sub-forums Joe has listed, if you're making a post that contains all quoted text, the software will not let you submit it without atleast 3 characters not bound by quote tags.

 

[rederob]

Copper inventories are declining in the US????
It is apparent that the subprime and housing crises are not materially impacting copper's bullishness.
Add to this LME cancelled copper warrants hitting 3-year highs, plus little change to the Shanghai warehouse stock levels in months, and we can see that "fundamental" factors are propping up the red metal's price.
It will take the better part of 18 months for the subprime and housing sectors to rectify themselves, which means a long wait to get back on the commodity freight train for another ride of a lifetime.
The next ride is likely to be stronger and longer, as by then the impact of emerging economies will be considerably greater. Cap this off with benign western economies consuming to their heart's content and we have the critical ingredients for a massive bull market.
I am presently looking at OXR for a possible purchase under $3.30 but with their precious metals exposure, as well as base metals, I am only "hopeful" and not expectant.

 

[BREND]

Early January is always a good month to buy copper futures, and I always tell my customers to buy copper at year end or early Jan.

Because there is a transition from low demand season (December) to a high demand season (1st Quarter). Hence copper price usually rises during this period.

With the huge amount of cancelled warrants building up now, the next thing that we will see is falling inventory, and this will push copper price even higher.

But I will be caution not to be overly bullish, esp if copper price rises above $7500. I'll ask my customer to sell copper call option strike $8200 or above if copper rises to $7500, premium would be attractive then.

After copper rally, the next metal that I'll be interested will be aluminum. This metal is priced close to its production cost (US$2350). So by buying aluminum at $2400 (3 month futures) represents little risk in my view.

And towards the middle of the year, if agriculture price starts to cool down, then I'll ask my customers to buy some soybeans, corns, wheat etc.

At the same time, still waiting for gold and silver price to cool down. In the environment of falling USD and high inflation, precious metal will be good investment.

This summarised my strategy for my customers in 2008.

 

[rederob]

Rising petrol\gasoline prices are making people think much more seriously about the merits of an electric (hybrid) car.
My Mitsubishi took just over $80 to fill last week - the first time I have ever paid so much. I average almost 1000k per week, meaning on an typical week I fill up twice.
The maths are almost there to make electric cars not just an environmentally friendly alternative, but economic good sense to boot.

 

[rederob]

Top 20 car sales in the US include 5 hybrid types.
Note in the below chart that small cars are dominating sales.
The Chev Malibu was voted "car of the year" in 2008 and has great sales to date: It also is available as a (Mickey Mouse) hybrid!!!

 

[wayneL]

Rising petrol\gasoline prices are making people think much more seriously about the merits of an electric (hybrid) car.
My Mitsubishi took just over $80 to fill last week - the first time I have ever paid so much. I average almost 1000k per week, meaning on an typical week I fill up twice.
The maths are almost there to make electric cars not just an environmentally friendly alternative, but economic good sense to boot.

Re electric cars:

No link, but I heard something the other week that hybrid cars aren't the green alternative they are promoted to be, in fact are worse than a pure fossil fuel small car.


<edit to add link> http://www.guardian.co.uk/cars/story/0,,1766869,00.html

 

[rederob]

Re electric cars:

No link, but I heard something the other week that hybrid cars aren't the green alternative they are promoted to be, in fact are worse than a pure fossil fuel small car.


<edit to add link> http://www.guardian.co.uk/cars/story/0,,1766869,00.html

Whatever the test outcomes, the fact remains that a hybrid version of the same vehicle with the same base power plant will achieve improved milage.
I think that "plug-ins" will soon hit the market and take over in the sales stakes, as a more-electric alternative (than hybrids per se) will save huge amounts on the weekly gas bills in years to come.
Those matters aside, this thread was themed on the role of copper in a vehicle market moving quickly to "electric".
The time has come.....

 

[wayneL]

My Krugs are 8.5% copper.

Just thought I'd mention that.

Missus also saved a big bag of 1c & 2c coins. I thought she was a bit kooky at the time, but she may have made us rich.

 

[boy123]

Buying season for copper in China is over, price should be trending down over the next few weeks or months.

 

[Mofra]

Much is being made in the media over the rising price of copper. It is apparently now cost effective to melt down pennies and nickels for the copper content, although the Federal government is about to outlaw that.

But there is no copper shortage in the world, and the world's largest copper reserve is right here in the United States. It is not the Kennecott copper mine in Utah, which is the world's largest open pit mine. In fact, these copper reserves are not even in the ground. There is hundreds of millions of pounds of copper hanging on telephone poles in the U.S., and much of it has already been abandoned. One problem communities face is a lack of pole space for community fiber. The problem has been exacerbated over the years because it has been cheaper for the phone companies to simply lash new copper cables to poles than to first take down old cables. It is very common in many areas to see as many as four or five phone cables lashed to poles, which effectively prevents anyone else from using that pole space, even if they have a joint use agreement in place.

As the price of copper rises, someone will figure out it is cheaper to mine copper on poles than to dig it out of the ground, and some of those old cables will finally start to come down. In fact, we may already have crossed the threshold where copper telecom cables cost more than fiber telecom cables. And there will never be a shortage of raw materials for fiber cable--it is made from purified sand.

In any "crisis," there is always an opportunity. The copper price "crisis" will not only create new business opportunities, it may help solve some difficult community broadband problems as well.

A year or so old, however found this quite interesting. Copper wire theft is becoming quite a problem on the Melbourne train network as well.

 

[Investor123]

Safe Strategies to trade Copper

The commodity that I like to trade is copper, not because it is easy to make money, but because I had done a lot of research on this commodity while I was working as a commodity specialist.

Warren Buffett said investors should invest in the business that they understand. In commodity trading I would advise traders to trade in the commodity that they understand.

Copper is an excellent conductor of electricity, as such one of its main industrial usage is for the production of cable, wire and electrical products for both the electrical and building industries.

The construction industry also accounts for copper's second largest usage in such areas as pipes for plumbing, heating and ventilating as well as building wire and sheet metal facings.


Strategy number 1:

Buy the commodities that China needs and sell the commodity that China sells. Copper is mainly found in South America and Australia. Due to construction boom in China, copper has become a hot commodity, so copper is certainly a commodity that China needs.

This has resulted in backwardation for copper. If you do not know what does backwardation means, click here. So when copper is in contango, traders should grab this opportunity by selling far month contract and buying near month contract.

In the spread chart, value above $1 means copper is in backwardation, value below $1 means copper is in contango. Copper was only in contango 3 times since 2003. During that period of times, its best to trade spreads, means betting that copper will move back to backwardation.

Strategy number 2:

To understand commodity, we have to understand the seasonal trend of the commodity. Buying season for copper comes in when after Chinese New Year. That is when China factories start to place buying order for their production.

If you looks that copper chart, copper price always rises after February which is the Chinese New Year period. So traders should buy copper futures 1 - 2 weeks before Chinese New Year.

Both strategies mentioned above are relatively safe and highly profitable.

 

[Investor123]

Chart for Strategy 1:

 

[Investor123]

Chart for strategy 2:

 

[ducati916]

Copper inventories are declining in the US????
It is apparent that the subprime and housing crises are not materially impacting copper's bullishness.
Add to this LME cancelled copper warrants hitting 3-year highs, plus little change to the Shanghai warehouse stock levels in months, and we can see that "fundamental" factors are propping up the red metal's price.
It will take the better part of 18 months for the subprime and housing sectors to rectify themselves, which means a long wait to get back on the commodity freight train for another ride of a lifetime.
The next ride is likely to be stronger and longer, as by then the impact of emerging economies will be considerably greater. Cap this off with benign western economies consuming to their heart's content and we have the critical ingredients for a massive bull market.
I am presently looking at OXR for a possible purchase under $3.30 but with their precious metals exposure, as well as base metals, I am only "hopeful" and not expectant.

Well electric cars are seemingly on the increase. What about your hypothesis with regards to copper? Prices are falling and inventories are rising.




jog on
duc

 

[rederob]

Well electric cars are seemingly on the increase. What about your hypothesis with regards to copper? Prices are falling and inventories are rising.
jog on
duc

I think my copper price estimates will be blown out of the water in the next bull run.
Careful reading of the post you quoted states that I was looking at an 18 month time frame for the subprime meltdown to wear through. Given you were not posting here I have no idea of your thoughts on this at that time. I think my time frame is reasonable, although "globalisation" seems to add a new spin on old themes.
You might notice that LME inventories are where they were over 4 years ago, and remain well below historical highs. I am confident copper inventories will rise substantially in the near term as present market conditions are dire, so prices will drop further still.
There remains a questionmark over copper stock builds in terms of percentage increases week on week. Overall copper inventories have been rising at a subdued pace. If you were using copper as a "barometer" for industrial activity the forecast would be for fair weather, not foul.

 

[Reealjrd]

I dont trade in copper but i can say that with the increase in oil and gold prices copper is also going to move towards to its high.