Saturday, April 11, 2009

Is copper price rebound only temporary?

Brent Cook author of a The Gold Report on, makes the case that the reasons for the current rebound in copper price are temporary:
  • China and others are restocking strategic reserves at bargain prices
  • Copper producers are holding back supplies from the market due to low prices or lack of buyers
  • Asian buyers are converting US dollars into hard assets
  • Short covering as the copper price stabilized
  • Market arbitrage made it cheaper to import copper cathode into China
  • Shortage of scrap supplies due to the lack of credit, low prices and slowing manufacturing activity
Copper closed at $2.02 a pound on Thursday, up from its recent low of $1.28.

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