Who Else Wants a Share in the Most Stolen Commodity of 2010?
By Aaron Tyrrell
The South African Chamber of Commerce and Industry reports $36.7 million dollar’s worth of copper was flogged on the black market in South Africa last year…
Phil Locker wrote in the Santiago Times: ’842 miles of copper wire were stolen in Chile [in 2010], enough to stretch between Santiago and Montevideo, Uruguay’.
There was a case in Tweed Heads in March 2010 of one bloke stealing copper from Country Energy.
These two got pinched selling $100,000 worth of copper wiring for scrap…
And, Dan Denning wrote back in December:
“The one [crime] that has increased almost beyond belief is copper theft”.
You get the picture.
Crooks want copper. Because, for them, copper is as good as gold.
You can click the links to read more about copper thefts:
Or you can skip them and read on…
Dan Denning wrote in the Daily Reckoningon Monday,
‘The Financial Times reports that copper prices are down 8% from their all-time high of $10,190 in February. “There’s no question that Chinese consumption has slowed and we are seeing a build-up of stocks in many of the warehouses in the region,” said one senior metals banker. “The copper market is getting a bit tired at the moment.”‘
It might be ‘looking tired’, but China’s Minmetals’ $6.5 billion bid for Equinox Minerals – a Sydney-listed copper producer – should tell you copper is still desirable as ever.
And that got me thinking.
Is now the right time for you to cash in on copper stocks?
I asked Diggers & Drillers editor, Dr Alex Cowie for his thoughts on copper this morning…
Here’s what he said:
‘Copper may as well be a precious metal. It ticks all the boxes I look for in a commodity.
‘Supply is inadequate. Not enough new major mines coming online. And demand from emerging economies (China in particular) is enormous. Testament to that, we’ve just seen China’s Minmetals make a bid for our biggest copper producer, Equinox.
‘The copper price is down two per cent in a month. It went up to just about $10,000 per tonne in February. And it’s down to $9,300 now…
‘I think it will struggle to get past $10,000 if only because it’s such a psychological barrier and it’s had a huge run already. This huge run is remarkable considering this is a huge market, which is now worth about $200 billion a year. That makes the copper market 50% bigger than the New Zealand economy.
‘I expect it to hover between $8500 and $10,000 for the rest of the year. (Though I hope to be proven wrong…)
‘But the fact is that even if the copper price was to fall to $6,000 a tonne, copper producers would still be laughing all the way to the bank.
‘If the copper price goes up 10 per cent, a good quality copper stock could go up 20 or 30 per cent – or more…
‘I’m actually going on a site visit to a copper company next week, as I’m looking to recommend another copper stock in the next couple of months.’
So that’s a tip for Diggers & Drillers readers to look forward to.
According to ANZ Commodity Research, high metal prices mean companies could spend an extra 40% on exploration in 2011.
More exploration might mean more discoveries.
And that could mean Mr Market gives copper shares a bit of a boost.
Now might not be the right time to buy. If the market is tired, as the FT reckons, you might want to wait for prices to lie down a bit longer before you invest.
But it could make now a good time to start investigating small-to-mid-cap miners who could make you big gains if and when the copper price starts to rise… which is exactly what Dr. Alex Cowie is doing for his readers.
Aaron Tyrrell
Money Morning
