Mixed blessing ; metal prices falling

[W3RSW]

http://www.telegraph.co.uk/finance/newsbysector/industry/mining/3543370/Metal-prices-fall-further-than-during-Great-Depression.html

Copper shoud be affordable again, but then again, if we have no money....

It'll be an interesting ride to see where the market, commodities, and economy finally stabilize.

Metal prices fall further than during Great Depression
The price of key industrial metals has fallen further over the last four months than occurred during the worst years of Great Depression between 1929 and 1933, according to research by Barclays Capital.
 
By Ambrose Evans-Pritchard
Last Updated: 7:29AM GMT 03 Dec 2008

 Kevin Norrish, the bank's commodities strategist, said the average fall in the price of copper, lead, and zinc has been roughly 60pc since the peak in July this year. All three metals were traded on the London Metal Exchange in the inter-war years so it is possible to make a comparison.

Prices for the three metals fell 40pc from their highs in 1929 before touching bottom in 1933, with the bulk of the fall in 1930 as the slump spread worldwide. "Lead and zinc have already lost more than they did in the 1930s," he said.

Copper was hit hardest during the Depression, despite the electrification drive in the US and the Soviet Union, falling 70pc at one stage before creeping back in the mid-1930s. The reason was an 85pc fall in US construction, then the biggest user of the metal.

[KB2WIG]

I went out to Homleo Despot last night and decided to check the price of Romex....  250' of 12/2 w/ ground    $55.00. Not bad compared to last year..........

 KLC

[W9GT]

I went out to Homleo Despot last night and decided to check the price of Romex....  250' of 12/2 w/ ground    $55.00. Not bad compared to last year..........

 KLC

Not so good though...when you look at the price 2-3 years ago was about $15.00 here!  Also single conductor #12 600V insulated wire was about $12-$13 for a 500' roll, now around $55.00!!! I don't know specifically what caused copper to skyrocket in price, but it does not now seem to be falling as fast as the price of oil.

73,  Jack, W9GT

[k4kyv]

AKA "sticky pricing".  The same for food.  The claim was that high fuel prices triggered higher transport and production costs that were passed down to the customer.  With the drop in gas and diesel prices, I haven't seen any decrease in supermarket prices.

And so far, I have seen no reduction of the the price of heating fuel.  I use propane and electricity here, so can't say for other types of fuel.  We'll see for sure at the next fill up, but so far, only a minuscule reduction has been promised for the electric rate.  Diesel has dropped dramatically at the pumps.  Since it's nearly the same thing as kerosene, heating oil prices should have dropped likewise.  WATSA fuel oil users in the Northeast?

Cost reductions always seem to trickle down at a much slower rate than cost increases... Like an audio compressor, fast attack time, slow release.

[W9GT]

Yeah...and natural gas pricing is still high here.  The gas company said that their price remains high because of what they had to pay for gas this past summer/fall in preparation for winter heating season.  They have a monopoly regulated only by the state utilities commission and not much can be done about it except complain...and then pay the price.  Hopefully present price reductions in the supplies will bring about later price reductions to consumers.  It is interesting that the price of natural gas follows the price of oil, regardless of the source.  Doesn't most of our natural gas come from domestic production?  And....wasn't T Boone Pickens promoting the use of natural gas for powering our vehicles, in addition to building wind farms for electricity?  The natural gas was to be diverted from power plants who are presently using it to generate power.  It is also interesting how the price of diesel remains so high even after the precipitous drop in gasoline prices. 

73,  Jack, W9GT

[Carl WA1KPD]

The gas company said that their price remains high because of what they had to pay for gas this past summer/fall in preparation for winter heating season. 

Jack,

Don't know who your company is but that having spent a number of years in that industry it is a logical explanation.

Consider the physics. The transportation pipelines (Those from the actual gas field to your local company)  from the gas field are only so big. In the winter they are too small to meet the demand that is imposed on them. And in fact it would be very expensive to size them to meet the peak demand at any time. The same issue holds for electric power plants. They have to be built for the peak demand to avoid brownouts. The consequence is that there are many times when the capacity sits unused

However in the summer when there is little or no demand for heating gas there is plenty of excess pipeline capacity. So your local company has to buy up gas in the summer, transport it and store it locally. Gas is usually cheaper in the summer so it  makes sense. This time the market has been knocked out of place so it is not true.

Carl
/KPD

[WA1GFZ]

If you think copper is cheap look at the price of a doug fir 2 X 4.
Great time to build right now.

[Jim, W5JO]

One of the reasons for high copper prices is the copper mines in Southern New Mexico and Arizona closed about 2 years ago.  There were several reason for the closures, one being availability drove prices below what they could produce economically.

So to rid themselves with high labor costs, they closed the mines.  The mines are mainly owned by foreign interests and don't care a whit about workers here if they can either mine or purchase cheaper elsewhere.  Sounds a bit like oil doesn't it?

[N5RLR]

Payout for scrap has taken a hit.  Locally, aluminum cans are about 35¢/lb. from a high of 80¢/lb. in April.  I expect it to dip lower.