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Copper tracked a modest rebound on Tuesday, climbing 2.5 percent to touch $6,630.25 per tonne in early morning trading on the LME. In the two previous sessions, the metal, often looked to as the barometer of economic health, lost almost 10 percent of its value.
By Leia Michele Toovey- Exclusive toCopper Investing News
Copper for three-month delivery in London fell to $6,430 a tonne on Monday, just one month after hitting a peak of $8,042 per tonne. Along with other commodities, copper has been in a freefall for nearly a month, since worries about Greece’s ability to service its heavy debt load came to the forefront. Copper prices collapsed in 2008 as a result of the global economic crisis. Throughout 2009, copper prices recovered as investors bet on an economic comeback. Now, the metal is taking a hit as investors fear that the global economic recovery is losing speed.
Of particular influence to copper, sentiment is spreading through the markets that growth has peaked in consuming powerhouse China. Add that to fears that Europe may become insolvent, and you have the recipe for the metal’s unraveling. If fundamental support fails to return, analysts fear the metal could break the $2.00 per pound price point, a level not seen since the depth of the recession. The optimists, however, think the market’s been oversold and due for a rebound on strong physical demands that could emerge below $2.60 a pound.
Signs also point to a slowing growth in America. Manufacturing in the New York region expanded at a slower pace in May than forecast, a report from the Federal Reserve Bank of New York showed. Copper futures for July delivery declined 20.2 cents, or 6.4 percent, to $2.932 a pound on the COMEX in New York.
Rio Tinto’s (NYSE: RTP) management is optimistic about the copper market. In the midst of the metals free-fall on Monday, the company’s copper division released a statement claiming that “The medium- to long-term outlook for copper is positive with a tight supply situation expected over the next decade.” At the World Mining Investment Congress, Rio Tinto Copper Chief Executive Andrew Harding said that “The outlook for copper is positive…demand will be driven by China…India will also contribute.” Harding believes that the copper market is due for a supply crunch as miners struggle to extract more ore from maturing copper mines.
Company News
Fjordland Exploration Inc. (TSX-V: FEX) and Cariboo Rose Resources Ltd (TSX-V: CRB), the Woodjam Joint Venture partners, are pleased to report that Gold Fields Horsefly Exploration Corporation,(NYSE: GFI), has forwarded additional drilling results from the 2010 drilling program on the Woodjam North gold-copper property, located 45 kilometers east of Williams Lake in central British Columbia. The winter program started in early February 2010 at the Takom Zone, where seven holes totaling 2330.5 meters were completed; encouraging results from this program were reported in a news release dated April 21, 2010. The drilling has since progressed to the Deerhorn Zone where 9 new holes totaling 2723.4 meters were completed. Drilling is currently in progress on the Spellbound area, located approximately 1500 meters to the east of the highlight drill intersection was a 90.8 meters section grading 0.58g per tonne Au and 0.39 percent Cu, including a higher-grade intercept of 30.4 meters grading 1.10g per tonne Au and 0.72 percent Cu. Hole DH10-05 was lost at 194.5 meters, while still in mineralization. Two other drill holes did not intersect any mineralization.
Nevada Copper Corp. (TSX.V: NCU) is very pleased to announce further drill results at the 100 percent owned Pumpkin Hollow Property located in Nevada. To date, results from 42 of 63 holes that will be drilled in the expanded program have been reported with further drill results pending. NC10-31 was drilled as a step out hole to follow up open mineralization in the southeastern portion of the North Deposit. NC10-31 confirmed the continuity of mineralization with the adjacent holes and discovered two new deeper zones. The four mineralized zones in hole NC10-31 total over 178 meters of greater than 0.80 percent copper. The two new deeper zones discovered intersected in hole NC10-31 are 83.8 meters (averaging 0.98 percent copper and 47.2 meters averaging 0.82 percent copper. Mineralization remains open and follow up drilling is currently being planned.
With help from Assistant Editor Vivien Diniz