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Copper market report: prices higher than prospects.

Article Excerpt
RED METALS DISTRIBUTORS reported mixed results in the first quarter during last month's Copper and Brass Servicenter Association annual meeting in Phoenix, along with unanimously deep concerns about their prospects for the rest of the year in the face of severe copper price volatility.

Copper prices have more than doubled traditional levels in the past two years, and remain highly unstable. Copper distributors, and their customers, remain conservative about purchasing because of the unpredictable nature of pricing.

Today's volatility and complex market conditions force buyers to take into account far more variables than at any time in the past 20 years. "It's a daily guessing game," said Garret Herringdon, general manager of Southern Copper & Supply Co. Inc., Pelham, Ala.

In recent months, the Comex spot copper price dipped from about $3.14 cents per pound on Dec. 1 to $2.51 on Feb. 1, rebounding to over $3.61 by late April. The dramatic, 63-cent drop in January and February prompted some large customers to bypass service centers and place large orders directly with the mills, but the dollar jump in March and April sent them back to distributors, reported service center executives during a press conference at the CBSA meeting.

In that respect, copper distributors actually benefit from the price volatility, noted Dan Kendall, president of ABC Metals Inc. in Logansport, Ind. "Many customers...

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