By Leia Michele Toovey – Exclusive to Copper Investing News

Copper stretched forward Friday, retracing from the five week low it hit on Thursday. Thursday’s price was weighed down by a stronger dollar and weakening global economic growth. The phrase “global recession” popped up again this week after German data showed business confidence declined to its lowest level in almost three years. A steeper-than-expected drop in U.S. existing home sales in June added downside pressure as concerns grew about the impact of the U.S. housing slump. On Friday, copper moved up as the dollar remained weak and as oil prices jumped. The red metal’s gains were capped, however, by anticipation of increasing stockpiles and fears of a global economic recession. The LME announced Friday that global copper inventory rose by 2,600 tonnes to 133,475 tonnes. On Friday, Copper for delivery in three months on the London Metal Exchange added 0.6 percent to $7,950 a tonne. The contract slipped as much as 2.4 percent Thursday, the most in almost three weeks.

Copper prices in Shanghai headed for a third weekly decline on speculation demand may be weakening amid rising global inventories. Copper for October delivery on the Shanghai Futures Exchange, fell as much as 0.9 percent to 60,770 Yuan ($8,906) a tonne, and is down 1.7 percent so far this week. India’s copper futures were slightly higher on Friday with the benchmark August copper trading at 336.60 rupees per kg, up 0.39 percent from the previous day. Analysts’ project August copper will find support at approximately 328 rupees.

World copper giant Southern Copper (NYSE:PCU) announced that their second quarter earnings dropped 24 percent, compared to the same period a year ago. Despite record high copper prices, strikes and higher fuel and production costs were cited as the culprit in declining profits. Strikes at Mexico’s Cananea copper mine, cut into second quarter revenue. Miners at Cananea, the largest mine in Mexico, have been lobbying for nearly a year for wage hikes and improved health and safety conditions. At Southern’s Toquepala mine, one of Peru’s largest copper mines, miners found depleting grades of ore quality, causing the amount of metal generated to decline. Fortunately, high world copper prices offset increased fuel and power costs, which would have otherwise taken a big chunk out of Southern Copper’s earnings.

Teck Cominco (TSX, NYSE:TCK) increased second-quarter net earnings to C$497-million, an increase of 2.5% over profit of C$485-million a year earlier. Copper sales (along with coal) offset a 60% decline in profits from zinc. The copper division contributed 53% of the operating profit in the quarter, and the coal unit accounted for 35 percent.

In the near term, BHP favours expansion of their Escondida project, over their Southern Australian Olympic Dam project. Although BHP is a large company, with adequate funding to back both projects, simultaneous expansion could prove too risky. To compensate for losses resulting from depleting ore grades at the Escondida project, BHP will expanded the size of the open pit. Drilling results have already indicated that there is more copper to be mined in the surrounding area. Starting in 2009, BHP is expecting that the Escondida project (if left as is) will decline at a rate of 8-9% per year. The Olympic dam is currently profitable and will likely continue on that path as uranium, in addition to copper, is mined from the site. BHP considers uranium to be as much a driver for this mine as copper. An update on the Olympic dam is due in October, at this point BHP is being quiet about their future intentions for the mine.