Bloomberg – At the Pacorini Group warehouses in New Orleans, the 15,000 metric tons of copper that have accumulated since September are enough to wire about 7 million refrigerators and make everyshort-seller salivate.
“You’re seeing 1,000 tons here, 1,000 tons there,” said Mario Casciano, 40, U.S. chief executive officer of Trieste, Italy-based Pacorini. For two years, “we used to have nothing coming in.”
That helps explain why the booming market for industrial metals may be a cropper in 2007. While everything from aluminum to zinc has risen at least 25 percent this year and as much as 157 percent, no one is forecasting a continuation of the five- year bull market.
The retreat may be abetted by rising production, a slowing economy and speculators, including hedge funds, who eight months ago began borrowing money to sell copper on the so far- successful assumption they could buy it back at lower prices, according to U.S. government data. Builders began construction of U.S. houses at the slowest pace in six years in October just as global production of copper is poised to increase 4.7 percent in 2007, more than double this year, the International Copper Study Group in Lisbon says.
Even Jim Rogers, chairman of New York-based Beeland Interests Inc., who insists the bull market in commodities will last at least another decade, now says copper prices are “correcting” as a U.S. recession “slows demand for everything.”
