Copper

Copper is one of the most important industrial metals. It is the best non precious metal conductor of electricity and is widely used for power distribution and electric drives. Contrary to popular belief, the introduction of optical fibre in communication lines has led to an increase in demand for copper since it is the preferred carrier for the last mile or segment. Furthermore computers and other hardware all require copper and copper alloys. Copper and brass are the materials of choice for plumbing, taps, valves and fittings. Today’s average size automobile contains about 27.6 kilograms of copper and this is increasing with the use of Hybrid cars.

Copper has been said to have “a PhD in economics” because it is sensitive to economic trends. The price stagnated in the “Great Mining Depression” from 1997 to 2003. The copper price subsequently went exponential from 2003 to 2006 quadrupling from about $1.00 per pound to almost $4.00 per pound. It then did a triple top in 2006, 2007 and 2008, a very bad technical sign. The credit crunch and market correction of late 2008 did it in and prices dropped from $4.00 per pound to $1.25 per pound in a few short months. In early 2009 it made a nice recover to about $2.50 per pound, where many producers still make money.

The key to the price of copper and also to the global economy has been Chinese demand. China demand for copper is now about 20% of global demand. The government of China has been trying to engineer a soft landing from the booming economy and this slowdown is affecting the price of copper. The current easy money policies of the global central banks, particularly the US and China, will keep demand for copper high.

China has been taking advantage of the low prices of copper producers and explorers brought about by the credit crunch and buying up large copper deposits worldwide. When the economy recovers, many of the world class deposits will already be controlled by China for their nefarious purposes. New supplies of copper will have to be found for the rest of the world. This will set the stage for a possible super rally in the price of copper down the road. The future looks bright for copper investors who position themselves for the recovery.

The Omineca region of British Columbia is also an area that is rich in copper as well as gold. This website will profile companies involved in exploration in the Omineca region and help the investor get a quick overview of all the players.

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