Trades and observations from a British contrarian stock investor

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Tuesday, April 6, 2010

Copper prices up 300% since lows of early 2009 to $8000/tonne

London copper futures rose to their highest level since August 2008 to move over $8000 per tonne, another worrying signal of an overheating commodity sector. The all time record for copper prices was $8,860. Copper prices have nearly tripled from a low of $3,328 per tonne reached in February 2009, with a gain of 20% year to date. The second quarter of the year typically sees Chinese copper demand surge as copper consumers fire up production after the Lunar New Year holidays in January or February. China's 10.7% growth in fourth-quarter gross domestic product are driving demand for the metal. Santiago Gonzalez, Chile's Mine minister recently said the disparity between stocks and prices is the greatest in 20 years, and that the situation is being closely monitored.

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