Copper producers from Glencore Plc to Freeport-McMoRan Inc. spent most of this year getting slammed by the metal’s worst slump since the recession. But there are some folks who are cheering.
With prices heading for a third straight annual decline, the rout is a welcome reprieve for metal buyers like electricians and builders who put about 400 pounds (181 kilograms) of copper into the average U.S. home.
As recently as 2011, copper traded in New York was at all-time-highs, after more than five-fold gains in the previous decade. Now, with demand growth cooling in China, the biggest user, global surpluses have emerged.
“Business has been so much better — the best in about 10 years,” said David Chapin, the president Willmar Electric Service, a Minnesota-based company that spends about $1 million a year on copper wire it installs for clients in several Midwest states.
While that’s only 5 percent of Willmar’s total costs, cheaper metal is boosting profit on projects that a few years ago were close to being money losers, Chapin said.
On the Comex, copper futures fell 27 percent this year to $2.054 a pound and are heading for the biggest annual retreat since 2008. The metal touched $2.002 on Nov. 23, a six-year low. Prices haven’t traded below $2 since 2009.
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