Copper Commodities Project Ching and Patrick

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Copper Commodities Project

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Copper Commodities Project Ching and Patrick

  1. 1. Copper IB Economics HL C. Fung and P. Theile
  2. 2. HISTORY OF THE TRADING OF THE PRODUCT, Chile – 2,350,000 US – 1,890,000 Canada – 740,000 Russia – 600,000 Indonesia – 380,000 Australia – 420,000 Peru – 400,000 China – 350,000 Zambia – 350,000 Poland – 340,000 Kazakhstan – 220,000 Philippians – 115,000 Zaire – 40,000 Where is it produced? (in tonnes)
  3. 3. <ul><li>Who manufactures copper? </li></ul><ul><li>Copper mining companies (eg. Freeport McMoran, Codelco) </li></ul><ul><li>Where is copper traded? </li></ul><ul><li>Primarily the London Metals Exchange (LME) ; also the Commodities Exchange Division of the New York Mercantile Exchange (COMEX/NYMEX), and the Shanghai Metal Exchange (SHME) </li></ul><ul><li>What goods are made from copper? </li></ul><ul><li>Building construction (eg. Pipes) </li></ul><ul><li>Electrical and electronic products (eg. Wires) </li></ul><ul><li>Transportation equipment </li></ul><ul><li>Industrial machinery and equipment </li></ul>HISTORY OF THE TRADING OF THE PRODUCT;
  4. 4. <ul><li>1900: $357.00/ton </li></ul><ul><li>2006: $6,939.00/ton </li></ul><ul><li>Almost 2000% increase; </li></ul><ul><li>The price of copper has steadily increased since 1900, but experienced a huge price spike in 2006 when the prices of many other commodities rose astronomically (price of oil/barrel $80/barrel - $140/barrel) </li></ul>PRODUCT PRICING,
  5. 5. PRODUCT PRICING,
  6. 6. <ul><li>What conditions are responsible for large fluctuations in price? </li></ul><ul><li>Change in the economy. </li></ul><ul><li>Rise in demand. </li></ul><ul><li>In 2006, most commodities experienced a sudden increase in price due to India and China emerging as world powers and primary users of raw materials; </li></ul><ul><li>Also, increased and frivolous spending in the United States </li></ul>PRODUCT PRICING;
  7. 7. <ul><li>Is there an industry group that influences the availability and price of copper? </li></ul><ul><li>International Copper Cartel (1935 - 1939) </li></ul><ul><li>Copper producers in South America, Europe and Africa formed the ICC. </li></ul><ul><li>Aim: Smooth price fluctuations by indirectly influencing prices through supply </li></ul>INDUSTRY GROUPS & TRADE AGREEMENTS, “ [To] bring about better conditions in the production, distribution and marketing of copper throughout the world outside of the United States…&quot;
  8. 8. <ul><li>Is there an industry group that influences the availability and price of copper? </li></ul><ul><li>Intergovernmental Council of Countries Exporters of Copper (1967 - 1988) </li></ul><ul><li>Aim: To get higher copper prices for members </li></ul>INDUSTRY GROUPS & TRADE AGREEMENTS; Chile, Zaire, Zambia and Peru formed CIPEC IN 1967 Australia, Indonesia, Papua New Guinea, and Yugoslavia joined later in 1975
  9. 9. SPECULATORS;
  10. 10. <ul><li>The International Copper Study Group </li></ul><ul><li>(http://www.icsg.org). </li></ul><ul><li>Copper Development Association. “The Copper Page”. </li></ul><ul><li>(http://www.copper.org). </li></ul><ul><li>Global InfoMine. “Copper Mining”. (http://www.infomine.com/commodities/copper.asp). </li></ul><ul><li>International Copper Assocation. “Copper Info”. (http://www.copperinfo.com). </li></ul><ul><li>Callaghan, R. &quot;Minerals Information.&quot; USGS. 17 Apr. 2008. U.S. Department of The Interior. </li></ul><ul><li>Lugaski, Tom. &quot;Where is Copper Mined?&quot; The Modern Copper Industry. 20 May 1997. University of Nevada. (http://www.unr.edu/sb204/geology/modern.html). </li></ul>BIBLIOGRAPHY.

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