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Copper continues its run.

Finding out what was in store for copper scrap markets was on the minds of many people who attended the Spotlight on Copper during the Institute of Scrap Recycling Industries Inc. (ISRI) 2006 Convention & Exhibition in early April.

While some of the attendees in the packed room expressed the opinion that copper markets had peaked, the three speakers took a far more bullish outlook on where copper markets would be heading during the rest of the year.

The consensus seemed to be that copper scrap was likely to continue its upward climb. The main reason for their upbeat analysis is the steady-to-strong demand for the material, while new capacity is still several years away from causing improved balance.

Robert Loewen with Robert J. Loewen & Associates, Scottsdale, Ariz., said that a copper peak was perhaps 18 months away. "I don't see a risk at $2.50 right now. It should climb up from here," he said. He added that supply constraints will limit the possibility of new supply coming on stream to help soften the upward climb of copper.

Tim Strelitz, California Metal-X, Los Angeles, represented the domestic copper consuming side. He also said that copper scrap markets were continuing to strengthen, leaving the domestic copper scrap industry at a major disadvantage, though they are running strong schedules. "It is still all about China. There are lots of dynamics for business."


John Gross of Scott Brass Inc., Cranston, R.I., said there was a rising trend for copper scrap. He noted that this is the fifth bull market for copper in the last 30 years.

The most surprising trend for the market has been that it has moved almost straight up during the past year. "In my mind there is a significant difference in the price and fundamentals of the market," Gross added.

Herb Black with American Iron & Metal, Montreal, Quebec, Canada, expressed the most bullish outlook for copper. "The market can't go down very much." He pointed to very strong fundamentals that will likely keep the metal fairly buoyant.

While acknowledging the strength of copper, Strelitz mentioned "non-fundamental" issues affecting the copper market, including what he said he feels is China's manipulation of copper.

Strelitz added that he sees Chinese buyers backing away from the market a little bit, giving the domestic side an opportunity to become more active in the metal. This may still mean that domestic consumers will have to be aggressive to obtain the material needed to feed their operations.

All three speakers noted that with the strong demand and new capacity still a bit away, the market is "one step away from a sharp run-up," in the words of one speaker.

"No one is sitting on serious tonnage," Gross said. "People are keeping minimum inventories on hand." He also warned scrap dealers not to speculate about the market.

Most intriguing was that the bullish outlook of the three speakers diverged with the initial outlook for many of the attendees at the crowded session. Before the session began, attendees were asked to indicate by a show of hands whether the copper scrap market had more room to run. Only a small handful of people indicated that they felt that copper scrap would continue its run.

The ISR12006 Convention & Exposition was held April 2-6 at the Mandalay Bay Resort & Casino.

(Additional news about nonferrous scrap, including breaking news and consuming industry reports, is available online at
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Title Annotation:Spotlight on Copper during the Institute of Scrap Recycling Industries Inc. 2006 Convention & Exhibition
Publication:Recycling Today
Geographic Code:1USA
Date:May 1, 2006
Previous Article:Nucor reports record numbers for year.
Next Article:Signs of strength.

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