By Leia Michele Toovey- Exclusive to Copper Investing News

Copper prices fell to the lowest in almost four years on concern that the deepening global recession will reduce metal demand through next year.

Copper prices have plunged 55 per cent this year, heading for a record annual decline. Copper futures for March delivery slipped 0.4 per cent, to $1.373 a pound on the New York Mercantile Exchange’s Comex division. Earlier, the price touched $1.3285, the lowest for a most-active contract since Jan. 4, 2005.

Copper fluctuated this week, first it declined, and then it pared losses as the US dollar plunged against the Euro, spurring demand from investors seeking alternative assets.  A weakness in the dollar may spark a rally for all the commodities. However, copper’s response to the Greenback’s fluctuation has been non traditional, historically a far greater spike would be expected.  This has analysts claiming that demand concerns are overriding the impact of any currency-induced bounce. In foreign-exchange trading, the U.S. dollar rebounded against its major rivals, recovering some ground after it was battered in the wake of the Federal Reserve’s historic efforts this week to revive the U.S. economy.  

Copper prices may be down, but spot fees paid to Chinese smelters to convert copper concentrate to finished metal have jumped by up to half in the past month, and by two-thirds from October. Copper smelters in China, the world’s top consumer of the metal, received treatment and refining charges of $88.5 per tonne for turning spot imported concentrates into copper, from $60-$70 a month earlier, and about $50 in October. The fees, now at their highest since April 2006, are encouraging Chinese smelters to demand higher yearly fees for 2009.

Copper demand is likely to remain relatively strong in 2009 despite the world economic slowdown, according to the CEO of the Europe’s largest copper refinery- Norddeutsche Affinerie. Bernd Drouven anticipated that although 2009 demand will be lower than 2008, it will be relatively stable. “There are parts of the world where economic growth is expected to continue, “Drouven said, adding that this especially included China, the world’s largest copper market. Drouven was also optimistic about copper demand from Eastern Europe, where large infrastructure improvement programs are underway. Norddeutsche said earlier on Wednesday that it expects sharply weaker results in its fiscal first quarter as the lower copper prices have triggered write-downs on inventories at its Cumerio unit. It said its full fiscal-year pretax profit to the end of September rose 36 percent to 341 million euros ($465.9 million).

Company news

Anglo American Plc. today cut planned investment by more than half as a rout in metals prices thwarted its $45 billion expansion program. The company joins Rio Tinto and Freeport McMoran Copper and Gold Inc, the world’s biggest publicly traded copper producer, in taking steps to reduce output and trim expansion.

Frontera Copper Corporation today announced that its Board of Directors had unanimously recommended that shareholders reject the unsolicited offer from Invecture Group to purchase all of the outstanding common shares of the Company for Cdn$0.59 per share. In its directors’ circular, the Board strongly recommended that all Frontera shareholders reject the offer and not tender their shares for the following reasons:  Superior proposals delivering greater value for shareholders may emerge,  the Offer undervalues Frontera’s assets, the timing of the Offer is opportunistic given the recent decline in the price of copper and in the price of Frontera shares, the Offer is highly conditional and discretionary, there is uncertainty with respect to Invecture’s intentions, the Company’s financial advisor has provided an opinion that the consideration offered pursuant to the Offer is inadequate, from a financial  point of view to Frontera shareholders other than Invecture and its affiliates.  RBC Capital Markets has been retained as the Company’s financial advisor to assist in the examination and consideration of various corporate strategic alternatives. The process of identifying and engaging other potential acquirers is currently well underway.