Monday, June 05, 2006
Copper riding high but considered ready for a fall
Marketplace by Bloomberg - International Herald Tribune
BHP Billiton, the biggest mining company, spends 61 cents to produce a pound of copper and sells it for $3.15.
The market's largest-ever profit margin is evidence that copper is headed for a record plunge, perhaps as much as 25 percent in a day, said an analyst, John Tumazos of Prudential Equity Group LLP. Copper doubled in the past year on betting by speculators, he said.
After a fivefold increase since 2001 to a record level in May, copper fell 11 percent in one week, the most ever, a sign that the rally might be over. The volatility of copper - the rate at which the price moves up or down - during the past 10 weeks was at the highest level in history, according to data compiled by Bloomberg. Prices fluctuated by 48.5 percent in the week ended May 26
BHP Billiton, the biggest mining company, spends 61 cents to produce a pound of copper and sells it for $3.15.
The market's largest-ever profit margin is evidence that copper is headed for a record plunge, perhaps as much as 25 percent in a day, said an analyst, John Tumazos of Prudential Equity Group LLP. Copper doubled in the past year on betting by speculators, he said.
After a fivefold increase since 2001 to a record level in May, copper fell 11 percent in one week, the most ever, a sign that the rally might be over. The volatility of copper - the rate at which the price moves up or down - during the past 10 weeks was at the highest level in history, according to data compiled by Bloomberg. Prices fluctuated by 48.5 percent in the week ended May 26
Labels: Copper
