Copper Prices Continue to Rise

Paul Teague -- Purchasing, 12/2/2009 2:01:33 PM

Buyers tell Purchasing that they paid more than twice as much for copper cathode in November as they paid in December 2008. The average transaction price last month, they said, was $3.06/lb versus $1.49 last December.

The transaction price has climbed steadily all year. Strong demand in China is among the reasons for the price increases. But another factor, especially lately, has been fears of supply shortages due to labor strife at two South American mines.

Another factor could be production slowdowns at Kazakhsatn-based copper miner Kazakhmys PLC, one of the world's ten largest producers. Reuters reported that the miner produced 13.5% less copper cathode from its own concentrate in the third quarter. The cutback, Reuters said, was part of the miner's efforts to cut its overall costs.

But a new source of copper is coming on line. The Chinese company Golden Dragon has opened a mine in northern Mexico expected to have a capacity of 120,000 tons, according to the Chinese news agency Xinhua.

Meanwhile, copper on the COMEX exchange was priced at $3.22 earlier today. The price on the London Metal Exchange was $3.17 yesterday.

quoted from: Purchasing.com