From a high in February 2011 of about $4.60/pound, copper prices have fallen more than $1/pound to around $3.43/pound today. Prices have fallen for the past two days, primarily on fears that the global economy is being weighed down by the European debt crisis. Share prices for big copper miners Freeport-McMoran Copper & Gold Inc. (NYSE: FCX), Southern Copper Co. (NYSE: SCCO), BHP Billiton plc (NYSE: BHP), and Rio Tinto plc (NYSE: RIO) have all stalled.
The reasonably good economic news from the US over the past few days has not been enough to overcome the caution over the European crisis. The euro has fallen below $1.28 today, a further indication of just how jittery investors are about the European economy.
Copper prices are most likely to rebound as a result of supply shortages more than demand growth. Rising costs and more labor troubles have slowed production, and neither of these problems is solved either quickly or cheaply.
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