But what about copper ?
- Thread starter syswizard
- Start date
We're gonna need to see solid increase in demand across the board - Europe, US, Latin-America Asia, Africa & Middle-East in order for copper to rise significantly. Or at the very least, a majority of these regions. Remember that industrial demand for copper is driven a lot by construction where it's used for hot water piping and other things.
For demand to increase that must, we'd need to see major economic reforms that create purchasing power with the mass public and lead to serious investment in housing and commercial real-estate. The problem is that the political and upper class are holding on by a thread and the only way for them to survive and keep their power-structure in tact is to destroy the liberties that are required to lead to those developments. Liberties like free markets which would require deregulation - something the elites of Washington will not give up as it shifts a lot of power back into the working and middle classes.
For demand to increase that must, we'd need to see major economic reforms that create purchasing power with the mass public and lead to serious investment in housing and commercial real-estate. The problem is that the political and upper class are holding on by a thread and the only way for them to survive and keep their power-structure in tact is to destroy the liberties that are required to lead to those developments. Liberties like free markets which would require deregulation - something the elites of Washington will not give up as it shifts a lot of power back into the working and middle classes.
Well Evo, I appreciate that socio-political view.
But let's get back to the basic supply-demand situation.
I think the real problem is with China. That government is now starting to act to reduce growth and inflation. That's gotta be the main driver for supply. The US housing and construction market appears to be strengthening, yet I believe it's not a significant factor with respects to demand for copper.
As far as supply goes, I'm not sure if there is anything on the horizon that would change it....other than some strike or incidence of violence at one of the larger mines.
At $3+/lb, we are still way above the cost of production which I think is a $1.20 or so. Thus as long as we hold the $3 level, the mines will continue their output rate. At $2.50, there will be cut-backs. Below $2, they may stop production.
http://www.barrick.com/operations/copper/default.aspx
This really surprised me....I thought copper cost about a buck to produce.
But let's get back to the basic supply-demand situation.
I think the real problem is with China. That government is now starting to act to reduce growth and inflation. That's gotta be the main driver for supply. The US housing and construction market appears to be strengthening, yet I believe it's not a significant factor with respects to demand for copper.
As far as supply goes, I'm not sure if there is anything on the horizon that would change it....other than some strike or incidence of violence at one of the larger mines.
At $3+/lb, we are still way above the cost of production which I think is a $1.20 or so. Thus as long as we hold the $3 level, the mines will continue their output rate. At $2.50, there will be cut-backs. Below $2, they may stop production.
http://www.barrick.com/operations/copper/default.aspx
This really surprised me....I thought copper cost about a buck to produce.