Sunday, October 10, 2010
Copper price soaring but what about China?
Copper prices hit their highest price in 27 months this week, with a December closing at $3.7745 per pound. Analysts say the price is within 6.6% of the metals all time high. Barclay's price target for Phoenix-based Freeport McMoRan is now at $130, up from their previous estimate of $120. The stock closed this week at $95.51.
But the Financial Times reports that China's State Reserves Bureau, "the official body in charge of the country’s strategic commodities reserves," bought up an estimated 2% of global annual production of copper last year when it was much cheaper. So, if they cash in to take a projected profit of $1.5 billion they could either stabilize or perhaps drop copper prices. But it sounds like analysts expect that China will hold on to the stockpile and use it to meet rising national demand.
[photo credit, Freeport McMoRan]
at 9:09 PM