the copper story

Yes the sp is dropping but I am yet to pinpoint any particular reason for this. I believe there are many reasons

I do believe that Copper itself plays a factor in this.....see next story

Copper prices continue to erode in grey outlook


Thursday, 11 April 2013

COPPER prices have fallen 5% since the start of the year after sliding almost 10% in 2012, according to the latest report from Thomson Reuters GFMS.



At a launch event for the group’s fourth annual copper survey in Chile, GFMS head of base metals research and forecasts Sanjay Saraf said copper sentiment over 2012 had shifted to a negative tone and was characterised by sideways trading since late 2011.

Saraf said that prices could spend much of the year within their recent broad trading range and cited macroeconomic influences as primary drivers on the market.

“The continued uncertainty surrounding the eurozone has recently been exacerbated by the eruption of the Cypriot debt and banking crisis,” he said.

“This together with ongoing caution regarding the economic outlooks for both the United States and China has helped to keep sentiment in the copper and broader commodities market on the back foot.

“Adding to this, on the fundamental front, has been a rise in global exchange stocks and in our estimate of copper inventories in Chinese bonded warehouses in 2012.”

A market surplus of 214,000 tonnes of copper in 2012 was attributed to a 4% increase in global mine production to 16.7 million tonnes and a sharp slowdown in the rate of expansion in Chinese demand, which halved to 4% last year.

Saraf said weakness in demand from end users in Europe also put substantial pressure on the market.

Production in 2012 reflected the highest annual increase since 2004.

Refined copper supply increased by 2% to 20Mt, which represented a decline in the rate of growth when compared to the previous two years.

The survey found, meanwhile, that global consumption totalled 19.8Mt in 2012, up less than 1% year-on-year.

GFMS said the resulting inventory build has contributed to the capping of the upside for prices through 2013 so far and that lower volatility was driven by the flatter copper price trend.

The global average cash operating costs continued to trend higher in 2012, rising 14% to $3527/t.

“In last year’s copper survey, we mentioned that the likely near-term trend would be for unit costs to continue to rise above inflation, and this scenario seems to be playing out,” Saraf said.

“Together with the related increase in capital costs, such movement has shifted higher the barriers to entry. Consequently, the economics of the industry do not look quite as attractive as they did perhaps only two years ago.

“This is already apparent from the decisions taken by some major producers this year in revising plans for new development projects.”

Upward operating costs were found to be the result of steady increases across all drivers of cost, rather than a seismic shift in any given variable