SOURCE: The Bedford Report

The Bedford Report

April 14, 2011 08:16 ET

Copper Stocks Stumble as Manufacturers Search for Cheap Alternatives

The Bedford Report Provides Analyst Research on Taseko Mines & Freeport-McMoRan

NEW YORK, NY--(Marketwire - Apr 14, 2011) - Copper prices have taken a noticeable hit this week as concerns about high commodity prices and risks to the Chinese and Japanese economies has weakened the demand outlook. Copper prices are sensitive to the market's economic outlook as the red metal is used to make wire, pipe, buildings, automobiles and appliances. The Bedford Report examines the outlook for companies in the Copper Industry and provides research reports on Taseko Mines Ltd. (NYSE Amex: TGB) and Freeport-McMoRan Copper & Gold, Inc. (NYSE: FCX). Access to the full company reports can be found at:

Copper's spike in price this year is leading a switch among manufacturers to aluminum as it is cheaper and also able to conduct electricity. Chris Burns, North American engineering director with US automotive parts supplier Delphi, explains that "with copper being at historic levels, there has been global interest in going to aluminum cables in cars." Currently the difference between the prices of copper and aluminum is enough to pay for the extra aluminum it takes to conduct the same amount of electricity as copper as well as cover the costs of retooling some manufacturing processes.

Aluminum Industry kingpin, Alcoa, estimates that if copper prices keep rising, aluminum could end up being substituted for 20 percent of the global 19 million metric ton annual refined copper market.

The Bedford Report releases regular market updates on the copper industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at and get exclusive access to our numerous analyst reports and industry newsletters.

Concerns that copper's price may have finally peaked has led to the possibility that hedging may soon return. John Meyer, an analyst at investment bank Fairfax, argues that "Copper hedging at these high levels gives companies security. Also if you are borrowing from banks, then hedging is often one of the conditions." Hedging programs allow producers to lock in current copper prices for future production, guarding against any potential price declines in the future.

Richard Adkerson, president and chief executive of Freeport-McMoRan Copper & Gold, said, "We have not hedged copper prices, and as a result we -- with a couple of minor exceptions -- have not hedged any other costs as well."

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