Thursday, January 15, 2009

35% Drop in Aluminum Prices

Alcoa Aluminum posted a $1.3 Billion Dollar Loss

according to Reuters
Alcoa said there was a 35 percent decline in aluminum prices in the quarter and a sharp drop in demand, particularly from the automotive, commercial transportation and building and construction sectors

I guess that pretty much makes Aluminum a wrap.

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I got into this business hauling scrap steel in Baltimore and changed over to Aluminum because heavy steel ruined my pick up truck. Not to mention steel girders were hard on my back.

Copper is alleged to continue to be scarce

According to the Metals: Price Review of the London Metal Exchange
Analysts are largely predicting continued tightness for some time yet: “There are constantly downward revisions to output growth in copper, partly because there have been delays to new projects,” says Barclays Capital’s Ingrid Sternby. “Mine production will grow some 800,000 tonnes less than anticipated due to technical problems and other supply constraints, and these factors are likely to last longer than the market had widely believed.”

There have been many disruptions to supply this year, from equipment failures such as that at the Collahuasi mine in Chile in early 2005, to the effects of earthquakes in Chile’s Cerro Colorado mine, along with the effects of industrial action at numerous many facilities.

Furthermore, industrial production growth is accelerating again, suggesting upward pressure on global demand in areas other than China, and further supply disruptions or delays to new mining projects coming online could exacerbate supply constraint for a longer period than some had expected. Many analysts are set to remain extremely bullish about copper prices in the longer term.

Copper is used in huge quantities by the US military. Bullets need copper. Afghanistan (and hopefully not Pakistan) is going to need a "surge" just like Iraq did. Bullets were said to be so scarce last year that some police departments reported that it was becoming difficult for them to find certain types of ammunition.
I think the military ordinance demand put a hurting on the availability of ammo (and by extension, copper) is displaying a graph (that I do not have permission to reprint here) depicting a recent sharp rise in Copper Prices.

I'm wondering if old heating elements might be worth more in 2009. Tungsten is required for Military armor, ammunition and cutting tools. Nickel is looking like its on the rise but I cant think of anything offhand that would be in a dumpster that would have enough nickel in it to make it worthwhile to scavenge.

I'll keep you posted

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