Copper prices out of sight; record high stocks

It seems like copper prices lately are getting just as much attention as the sky rockets gold has been sending in the financial markets. And from what has been happening during the past few weeks, November and December are going to be remembered as the months in 2010 when copper prices just took off and soared to new all time highs almost every week in these two months such as the shattering global price of nearly $4.45 a pound reached last Friday before the end of the year. It is amazing to see just what copper is selling for today compared to just over a decade ago when the red metal was being marketed in the 60 cent a pound range.

In addition, two of the four companies that have mines here locally saw their stocks end 2010 at soaring record high prices. Freeport-McMoRan Copper and Gold closed the year on Wall street at an all time record breaking price of $120.09 a share last Friday. This is quite a contrast to Freeport’s stock which had been selling earlier in the year for as low as $56.20 a share.

Meanwhile, Grupo Mexico, owner of the ASARCO Hayden Smelter/ Concentrator and Ray Mine Complex, ended the year at $4.05 a share, also an all time record high price for its shares of common stock. Earlier during the year, shares of Grupo were as low as $1.99.

Copper is not the only metal being produced at local mines here . These operations are also bringing out some small amounts of gold and silver, too at unbelievable prices. On Friday, gold was at $1,421 an ounce while silver has been ranging around $31 an ounce.

When mining first began in Globe back in 1873 and during the following two decades or so , the main interest was in producing and marketing silver and not copper during this period of time. Even today, it is not unusual in our community to find small stones containing silver on the ground while hiking through some of the local mountains. There is also molybdenum in some parts of the area which is used mostly to strengthen steel.

As for copper, 2011 is going to be a “bullish year” for the red metal according to Allen Sykora, who has been watching all of the soaring prices of precious metals during the past year for KITCO News. Sykora says:

Copper’s supply/demand picture may become so tight that many analysts and institutional investors say it is one of the commodities on which they are the most bullish for 2011. Copper has already staged an impressive rally from the commodity-wide sell-off that occurred when the global financial crisis hit in 2008. While Western economies were weak, copper demand remained strong in emerging economies such as China, the world’s largest consumer of the metal. Whenever recovery picks up in the West, demand should rise further. Meanwhile, analysts say, mining companies will not be able to ramp up output fast enough to keep up with demand, leaving a global supply/demand deficit for 2011.

(More of Allen Sykora’s remarks on copper and other metals can be found at www.kitco.com)