By Leia Michele Toovey- Exclusive to Copper Investing News

On Wednesday, U.S. copper futures retreated to a low dating back to July 2005.

The price of copper for March delivery traded down to $1.5170, a contract low. The session high was $1.5965 per lb. COMEX estimated copper volume at a light 6,427 lots. Over in London, the benchmark LME copper for three-month delivery was down to $3,435 a tonne, slightly lower than Tuesday’s closing value of $3,550.

London Metal Exchange (LME) warehouse stocks fell to 292,775 tonnes, a drop of 250 tonnes. Inventories are still running about 50 per cent above September at their highest levels since January 2004. Indian copper futures traded steady with a downside bias on Thursday as the deepening global slowdown continued to weigh on demand for industrial metals.  Benchmark February copper was down 0.15 per cent at Rs 178.80 per kg.

Prices of copper have plunged lower and lower in 2008, reflecting the continuous stream of poor economic data. Now that there has been agreement to calling the U.S. slowdown an actual recession, analysts are questioning how close we are to a depression.  If a depression does occur then we can expect copper to see more downside.  However, the speed at which the metal shed its value in 2008 is unlikely to be repeated. Analysts say the downside for copper should be limited by output cuts as producers adjust to low prices. Copper producers have lagged behind nickel, aluminum, and zinc producers in issuing output cuts as several big supply disruptions were announced before the downward price spiral began.

Copper has fallen by about 60 per cent since hitting a record high of $8,940 per tonne in July. The fall in commodity and equity prices in recent months has been likened by some to the Great Depression of the early 1930s. Lead and zinc have already shed an equivalent amount of their value in the current slowdown as they did during the great depression. Copper, however, has further to go to par depression losses. In order for an equivalent decline, copper needs to retreat to the low $2,000s. That level is close to the $2,100 estimated by some analysts as the average costs of production in the copper industry.

Company news

On Wednesday, Freeport-McMoRan Copper & Gold Inc said it suspended dividend payments, slashed its 2009 capital expenditure budget and lowered copper output due to a slump in metal prices. Freeport’s shares fell 13 per cent on the news.

Inmet Mining Corporation (TSX:IMN) and Petaquilla Copper Ltd. (TSX:PTC) announced that the final order from the Ontario Superior Court of Justice has been obtained approving the plan for Inmet to aquire all of the outstanding Petaquilla Copper common shares not owned by it for $2.20 per share in cash. Under the plan of arrangement, 8,490,310 common shares of Petaquilla Copper, representing approximately 5 per cent of the outstanding common shares, were acquired by Inmet increasing Inmet’s ownership to 100 per cent. In addition, each option or warrant of Petaquilla Copper ceased to represent a right to acquire common shares or any other security of Petaquilla Copper and instead represents a right to receive the in-the-money amount of such option or warrant. The common shares of Petaquilla Copper trading on the Toronto Stock Exchange, under the symbol “PTC”, will be delisted from the Toronto Stock Exchange on or about December 2, 2008. Concurrently, Petaquilla Copper will apply to cease to be a reporting issuer in all provinces of Canada.

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