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Seeking Alpha reported that copper seemed to be in ample supply which has lead markets for copper slid south.
Seeking Alpha reported that copper seemed to be in ample supply which has lead markets for copper slid south.
As quoted in the market news:
The supply of copper remains about the same as it was for 2010. It takes a very long time and costs a great deal of money to bring a new copper mine into production. Last fall, industry sources and investment company analysts forecast shortages and rapidly increasing prices for 2011. Many were forecasting a price of $11,000 a tonne by the third quarter. Prices seemed to be heading in that direction as copper crossed the $10,000 mark on February 2, 2011 and climbed a record high of $10,190 on February 14, 2011.
From there it began a slow uneven decline. It plummeted as August began, as did the equity markets, and on September 30 copper was down 30% for the year. The copper miners Freeport McMoRan Copper & Gold (FCX), Southern Copper Company (SCCO) and Ivanhoe Mining (IVN) fell to 50% of their February highs. IVN, while not a major copper producer at this time, is at work on the world’s largest undeveloped copper-gold project at Oyu Tolgoi, which is located in the South Gobi region of Mongolia. Rio Tinto (RIO) is a partner in this effort as is the government of Mongolia. Ivanhoe’s price is large part based on expectations of future earnings, which will start after commercial production begins in 2013.
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