Copper
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The Fight for This Obscure Copper Mine in Peru Is Your First Major Buy Signal
Most of the world isn't watching.
But they should be.
When you have giant private equity firms heatedly bidding on a copper mine, that's huge news by itself...
Add in China - the world's biggest commodities consumer, responsible for 40% of the world's copper demand - vying for the same mine, and you could be looking at an explosive spike in copper... and, of course, in the companies that get it out of the ground.
First, here's what's going on... Copper
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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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Dr. Copper Leads the Breakout in Commodities Prices
Demand for commodities of all kinds is ramping up at breakneck speed. And despite fears of a slowdown in China's economic growth, Dr. Copper is leading the rise in commodities prices.
Copper earned that nickname because it's thought to be a bellwether on the health of the global economy, thanks to its numerous economic uses.
Prices slumped earlier this month after Chinese Premier Wen Jiabao cut China's economic growth target to 7.5%, the lowest since 2004. China is the world's largest copper buyer, snapping up 40% of annual supplies.
However, predictions for weak copper demand were muted on Monday, as the Asian giant reported a stream of new orders pushed factory activity to an 11-month high in March. Growth in the U.S. manufacturing sector also picked up in March, more evidence that the world's largest economy is gaining momentum. The red metal jumped on the manufacturing data and is up 13.8% year-to-date (YTD).
The news has analysts predicting demand for copper is likely to pick up steam. "The U.S. is an important market, and with the economic outlook there brightening, demand is also likely to surprise to the upside," Commerzbank AG (PINK: CRZBY) analyst Eugen Weinberg told Reuters. But Dr. Copper is just part of the story. Just take a look at what's happening in other commodity markets...
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Glencore International, Xstrata Could Make the Next Biggest Deal in Global Commodities
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Copper: Possible Deflation Call and Warning for Stocks
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Buy, Sell or Hold: Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) is a Mining Play with a Major Upside
Sometimes the market offers investors a rare chance to buy shares of a great company on a dip. That's precisely the opportunity we're getting right now with Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX).
The current market volatility is giving investors with an eye toward long-term investments a great chance to buy shares in a world-class company.
FCX is one of the best-run global mining companies and a great way to gain exposure to gold and copper. So it's time to "Buy" Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) (**).
And if scooping up a top-notch commodities play on a pullback isn't reason enough, here are six other reasons to buy FCX.
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China's Urban Migration Catapults Copper Prices to New Heights
The next phase of China's economic plan is fueling a relentless appetite for electricity, spiking demand for copper. That has moved investors to drive up the price of the metal, as well as the stocks of companies that mine it.
Copper has risen 14% this year, with contracts traded on the London Metal Exchange tripling since December 2008. The Bloomberg index of world mining stocks this year has climbed 16% to the highest level since Aug. 1, 2008, driven by miners like Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX), and Ivanhoe Mines Ltd. (NYSE: IVN)
"Copper is red gold," Jeremy Gray, global head of resources at Standard Chartered PLC in Hong Kong told Bloomberg News. "We're on the verge of the biggest commodities bull market we have ever see."
Gray predicts the metal could rise by 50% to $12,000 a metric ton in the next six to 12 months.
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It's Time to Invest in Chile and Colombia – Latin America's Reigning 'Good Guys'
Looking for the next emerging markets set to skyrocket? Look no further than Chile and Colombia. That's right, thanks to recent elections, these two countries are ready to lead growth in Latin America. Read this report to find out exactly where to invest...
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