New York, New York (PressExposure) April 17, 2012 -- Danny Esposito, co-editor for Penny Stock Detectives, believes the growing demand for copper is being driven by emerging markets, as their middle class continues to expand on a daily basis. Esposito points out that, in 2001, China's demand for copper represented 10% of global copper investing demand. As of 2011, Esposito reveals in a recent Penny Stock Detectives article, a whopping 46% of worldwide copper demand was being driven by China.
"With 250 million new middle class citizens in China and another 250 million citizens to enter the middle class over the coming two decades, homes, roads, cars and all of the other luxuries we take for granted here in North America need to be built out. This is going to require tons of copper investing from China," notes Esposito.
According to Esposito's article, the price of copper is up 11% year-to-date. It has been one of the better performing industrial commodities. Many are skeptical of this rise, says the editor, because China has been stockpiling copper, reaching a record stockpile amount recently of 225,000 tons.
However, stepping back, this record 225,000 tons of copper represents only four percent of all of the world's global reserves, according to Esposito. Considering China's copper investing demand, the editor feels that 225,000 tons is small in comparison to the country's needs.
On the supply side, there was more demand than supply in 2011, says Esposito. Even though more mining companies are copper investing because of growing demand, there is less copper available to the world today than what was expected.
According to Esposito, the explanation is that, when copper is mined, it is in a form that cannot be used by society. Copper must be refined. The older mines especially are experiencing lower copper ore content. An example from the Penny Stock Detectives article is that one gram of copper mined is expected to produce 0.5 grams of refined copper. However, after the refining process, only 0.3 grams are produced instead. Taken over many tons, this slight shortfall adds up quickly, magnifying the urgency of copper investing by mining companies, says Esposito.
Esposito feels that, due to this trend, especially among established mines, copper supply is going to be restrained and will most likely mean that supply will not be able to meet demand in 2012.
With supply coming in short because of low ore grades and demand from China growing, Esposito says, copper investing through junior mining companies presents the potential for very attractive returns.
Published every business day, Penny Stock Detectives researches and analyzes low-priced opportunities in the stock market and individual stock market sectors. Penny Stock Detectives reports on penny stocks, small-cap stocks, micro-cap stocks, high-profit potential plays mostly under $10, and the stock market in general.
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