copper prices
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These Commodities Traders are Hoarding Copper for the Ultimate Profit Play
The only thing that investors have heard recently about the copper market is that there is vast oversupply ahead as evidenced by a buildup in copper warehouse inventories globally.
Inventories at LME (London Metals Exchange) warehouses have risen in excess of 190% since October alone. Inventories are now at levels not seen since 2003 at more than 590,000 tons.
LME inventories are closely watched by traders and economists alike as a key indicator of global economic strength and activity. Normally, such rising levels of copper in warehouses would be a flashing red light warning about economic weakness ahead globally.
According to the Commodity Futures Trading Commission (CFTC), traders have jumped on this inventory number and have accumulated the highest level of net short positions on copper in over six months.
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How a Massive Landslide Shifts Copper Supply
The U.S. mining industry was dealt a devastating blow as Kennecott Utah Copper's Bingham Canyon Mine experienced a pit wall failure causing a massive landslide with rocks and dirt covering the bottom of the mine pit. It's a miracle no one was hurt due to the vigilance of its owner, Rio Tinto.
Brian Hicks, portfolio manager of the Global Resources Fund, is very familiar with the mine, having visited it often. He also has personal ties as both of his grandfathers were once employed by the mine. When Brian saw the photo of the landslide posted on the web, he said the substantial destruction of the collapsed wall and falling rock was apparent, yet the tremendous scale and magnitude of the mine cannot be captured in pixels.
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How to Double Your Money by Investing in Copper
Copper prices are up 170% over the past four years - meaning huge profits for anyone who has been investing in copper.
But now many investors are bailing on the red metal. Prices have slipped about 9% this year, and inventories are soaring.
Copper prices hit an eight-month low today (Wednesday) as slowing economic growth has led speculators to take more short positions on the metal.
Copper inventories also appear to signal low demand. Stockpiles of the red metal in the London Metals Exchange are at the highest level since October 2003.
But what appear to be bearish signals for investing in copper are not the case. Here's what investors need to understand...
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Investing in Copper: Why Prices Will Rebound in 2013
If you're considering investing in copper, you need to know what's happening in China right now.
The country's extraordinary growth spurt - and the resulting surge in demand for copper - will create a global shortage of the metal this year, likely driving up prices. Copper is currently trading around $3.50 a pound.
Indeed, the real demand story for copper continues to be in emerging markets, particularly in China, which is responsible for about 40% of global consumption of the metal.
Last year, China's imports of refined copper hit a record high 3.4 million metric tons, according to the General Administration of Customs in China. This figure surpassed the previous high of 3.19 million metric tons, set in 2009 during the stimulus following the 2008 financial crisis. -
QE3 Is Strong Medicine for Dr. Copper
With QE3, Ben Bernanke just gave Dr. Copper a shot in the arm that should carry prices to new highs.
In fact, shortly after the U.S. Federal Reserve announced its decision to launch a third round of bond buying, copper rallied to $3.84 a pound on the Comex division of the New York Mercantile Exchange, up from around $3.35 in mid-August.
But that is only part of the story...
As "the only metal with a Ph.D. in economics' because of its widespread use in industrial applications copper is an excellent bellwether for the state of global economic activity.
And right now copper is predicting a major global rebound.
"Investors' expectations for global economic growth in the fourth quarter are rising and Dr. Copper is rallying," Andrew Rosenberger, senior portfolio manager at Brinker Capital told MarketWatch.
"Copper and other assets which are linked to global growth are taking the approach of rally now, ask questions later," he said.
For investors, there are lots of reasons to like copper right now.
Let's take a look...
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Three Ways to Profit from Rising Copper Prices in 2012
Global economic uncertainty can create a volatile metals sector and lead some investors to bail on the industry altogether.
But doing so would mean missing the huge profit opportunities from rising copper prices in 2012.
With uses in both manufacturing and construction, copper remains one of the world's most versatile metals. When economies are doing well, copper prices do well due to increased demand.
Currently, global economic woes are still around us. Greece is still on the fritz, and European uncertainty is weighing on growth - which caused a slip in copper.
Copper prices fell close to $3.00 per pound in September. They've climbed back to around $3.90 per pound, but are still about 18% from where they were a year ago.
The uncertain European outlook has triggered concern for one of its biggest trading partners as well as copper's ultimate buyer: China.
China is the world's biggest producer and consumer of copper, soaking up 40% of the world's supply.
Europe's economic effect on China has led to fear that the Red Dragon is headed for a cool down this year and that the slowed growth will weigh on copper prices.
The International Monetary Fund (IMF) predicts Chinese growth to proceed at a rate of 8.2% this year, down a full percentage point from last year's actual growth of 9.2%.
These concerns, however, are overblown - and off the mark. What's actually going on in the Chinese economy and copper market is supporting rising copper prices.
Here's why you, too, should be bullish on copper.
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Copper Prices Update: Prosper As Copper Becomes the "New Gold"
The Statue of Liberty is one of the most recognizable American icons in the world.
And as she towers 305 feet above Ellis Island, what's Lady Liberty wearing? Copper - 60,000 pounds of it.
Clearly, copper's big in art. It's also a key metal that keeps the world economy humming. Copper consumption has grown at an average annual rate of 4% since 1900.
