COPPER USES

Copper has been called "the cornerstone of today's world." It is essential to the transmission of electricity, so it is essential to the technology that powers our modern way of life. Without copper, you wouldn't be visiting this website, because without copper, computers wouldn't exist.

You're surrounded by objects right now that use copper, though you probably aren't aware of it. Copper shows up in places you may not expect. Take a look at these facts:

• The U.S. nickel coin is actually 75% copper, while the dime, quarter and half-dollar coins are 91.67% copper.
• A 12-piece set of silver-plate flatware (knives, forks, spoons) contains over a pound of copper.
• A typical home refrigerator/freezer contains nearly 5 pounds of copper.
• The average American car contains over 50 pounds of copper.
• The average single-family house contains nearly 450 pounds of copper.
• A Boeing 747 jet airplane contains 9,000 pounds of copper.
• The Statue of Liberty contains nearly 90 tons of copper.
• A Triton-class nuclear submarine uses 100 tons of copper.

Copper is used by itself or in alloys in practically everything you can think of-furniture, art objects, clothes, cosmetics, door handles, water pipes, DVD players, air conditioners, cookware, medical equipment, vacuum cleaners, locomotive engines, paint, iPods, solar power; the list is practically endless!

Copper's versatility is due to its malleability-it can be easily shaped, molded and rolled into tubes and sheets and drawn into thin wires. It's an excellent conductor of heat and electricity, resists rust and germs, and can easily be alloyed with other metals. It is also recyclable (in fact, it is the most recycled of all metals), so yesterday's water pipe can be turned into tomorrow's hybrid cars.

Copper truly is essential to our modern way of life, "the cornerstone of today's world."

PRICES

The price of copper is not set by mining companies or manufacturers, but by traders on commodity exchanges. The three commodity exchanges are: the London Metal Exchange (LME); the Commodities Exchange Division of the New York Mercantile Exchange (COMEX/NYMEX); and the Shanghai Metal Exchange (SHME).

There are two types of price quotes for copper: the spot price and the future price. The spot price is the price for the present trading day; the future price is for a date weeks or months from now. Speculators and traders deal in options and futures contracts in which they agree to make or accept delivery of a specific amount of a commodity at a specific date in the future at an agreed upon price. In the meantime, market forces of supply and demand, sometimes tied to world events, could raise or lower the price.

An example would be a trader agrees to buy 25,000 pounds of copper three months from today at $3.00 a pound. Two months from today, hurricanes severely affect the transportation of copper around the world, creating a severe shortage. This delay in copper supply sends the price of copper soaring to $4.50 a pound. When our trader's futures contract matures, he or she still pays the agreed on price of $3.00 a pound, but can now sell that 25,000 pounds for $4.50 a pound, thus making a $1.50 profit on every pound. Conversely, a drop in demand can send prices lower and a trader could end up losing money.

The price of copper doesn't fluctuate as wildly as the price of gasoline. But because copper is mainly used in industries that are sensitive to market forces (like home construction and auto manufacturing), the price of copper is somewhat dependent on the strength of those cyclical industries. Fortunately, since copper is the world's third most widely used metal, the demand for it in building, electronics and transportation around the world assures a relatively good price for copper for the foreseeable future.

Copper is a commodity whose prices can directly reflect the current state of the world economy because of its many uses in industrialized countries. As stated above it is the world's third most widely used metal, only iron and aluminum are used more, and is primarily used in highly cyclical industries such as construction and industrial machinery manufacturing.

Futures contracts are firm commitments to make or accept delivery of a specified quantity and quality of a commodity during a specific month in the future at a price agreed upon at the time the commitment is made. Less than 1% of all metals futures contracts traded each year result in delivery of the underlying commodities. Instead, traders generally offset their futures positions before their contracts mature. The difference between the initial purchase or sale and the price of the offsetting transaction represents the realized profit or loss.

NEEDS IN WORLD ECONOMY

Up until 2002, the United States was the world's largest consumer of copper. Since 2002, China has taken the title as the world's number one consumer of copper, accounting for nearly 50% of worldwide copper usage.

The construction industry consumes about a third of the world's refined copper; with production of electronic products accounting for another third; and the final third is split among consumer products, transportation and equipment. As the world's economies and population grow, the need for copper can only grow as well-it's estimated that every child born today will use 1,500 pounds of copper during his or her life. Multiply that by the millions of people being born in the world and it's clear that the need for copper will increase far into the future.

RECYCLING

Copper is almost 100% recyclable, a fact known by humans for thousands of years. An excellent example of this recyclability is the story of the Colossus of Rhodes, one of the Seven Wonders of the Ancient World. About 300 B.C., the people of Rhodes (an island in the Aegean Sea) decided to build a monument to the sun god Helios after the city was saved from invaders. The Colossus stood 110 feet tall and was constructed of bronze plates made from the melted down weapons of defeated armies (bronze is an alloy of copper and tin). After 56 years, the Colossus toppled over after an earthquake. For centuries it lay on the ground until Arab conquerors broke up the statue and hauled it away as scrap metal (using 900 camels), its bronze to be recycled again. The curious story of the Colossus of Rhodes is one reason experts claim that 80% of all the copper ever mined in the world is still in use today.

Copper is still the most recycled of all metals, with a recycling rate of 80%-85%. Nearly a third of the copper used in the world today is recycled copper. Whether it is pure copper or in various alloys, copper is recyclable regardless of its age. That's because copper retains its original qualities over time-its heat and electrical conductivity, its malleability, its corrosion resistance, etc., are not diminished even after thousands of years.

So because copper is completely recyclable and never loses its unique qualities, it's entirely possible that some of the ancient Colossus of Rhodes statue could wind up on America's roads as part of tomorrow's hybrid cars.