CopperIB Economics HL

C. Fung and P. Theile

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 – 420,000Peru – 400,000China – 350,000Zambia – 350,000Poland – 340,000Kazakhstan – 220,000Philippians – 115,000Zaire – 40,000

Where is it produced? (in tonnes)

Who manufactures copper?Copper mining companies (eg. Freeport McMoran, Codelco)

Where is copper traded?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)

What goods are made from copper?Building construction (eg. Pipes)Electrical and electronic products (eg. Wires) Transportation equipmentIndustrial machinery and equipment

HISTORY OF THE TRADING OF THE

PRODUCT;

1900: $357.00/ton

2006: $6,939.00/ton

Almost 2000% increase;

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)

PRODUCT PRICING,

PRODUCT PRICING,

What conditions are responsible for large fluctuations in price?

Change in the economy.Rise in demand.

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;

Also, increased and frivolous spending in the United States

PRODUCT PRICING;

Is there an industry group that influences the

availability and price of copper?

International Copper Cartel (1935 - 1939)

Copper producers in South America, Europe and Africa

formed the ICC.

Aim: Smooth price fluctuations by indirectly influencing prices

through supply

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…"

Is there an industry group that influences

the availability and price of copper?

Intergovernmental Council of Countries Exporters of

Copper (1967 - 1988)

Aim: To get higher copper prices for members

INDUSTRY GROUPS & TRADE AGREEMENTS;

Chile, Zaire, Zambia and Peru formed CIPEC IN 1967

Australia, Indonesia, Papua New Guinea, and Yugoslavia joined later in 1975

SPECULATORS;

BIBLIOGRAPHY.The International Copper Study Group

(http://www.icsg.org).

Copper Development Association. “The Copper Page”. (http://www.copper.org).

Global InfoMine. “Copper Mining”. (http://www.infomine.com/commodities/copper.asp).

International Copper Assocation. “Copper Info”. (http://www.copperinfo.com).

Callaghan, R. "Minerals Information." USGS. 17 Apr. 2008. U.S. Department of The Interior.

Lugaski, Tom. "Where is Copper Mined?" The Modern Copper Industry. 20 May 1997. University of Nevada. (http://www.unr.edu/sb204/geology/modern.html).