Turquoise Hill Won't Remain This Cheap for Long

It's been a long time coming for Turquoise Hill (NYSE:TRQ) and Rio Tinto (NYSE:RIO) concerning their stake in the massive Oyu Tolgoi, as they have finally come to an agreement with the Mongolian government to move ahead with its development of the next phase of the mine, which is to expand the major underground portion of the resource, which at this time, is estimated to account for approximately 80 percent of the mineral value of the mine.

Major sticking points which led to the differences have been resolved, including cost overruns and taxes.

With that behind them, the next areas to approve and make transparent will be an underground feasibility study and project financing. There is little to suggest there will be a problem in those areas, so it appears Turquoise Hill should fairly quickly be able to move operations forward.

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Is it Turquoise Hill's Time?

Financial news outlets were blaring out headlines and lead stories about an alleged agreement between the government of Mongolia and Rio Tinto (RIO) and Turquoise Hill (TRQ) concerning Oyu Tolgoi, the rich mineral resource in the country.


While it would be welcome news to investors if this is in fact the case, I will wait until I hear very clearly from Rio CEO Sam Walsh on his take in the deal.

Just recently Walsh stated very clearly that the final offer was on the table, and it's a check to me that he has been very quiet after the supposed blockbuster announcement from Mongolia’s Prime Minister Saikhanbileg, that past hindrances to the project have been resolved and the project is cleared to move ahead.


If that was really the case, it's very puzzling that there are no confirmations of this outside of a small story and line from Sky News in Australia, which asserted Walsh confirmed the story.
To me, this is too big of a story and impetus for it to be ignored by Rio and Turquoise Hill, if indeed a deal has been made.


Rest of story on Turquoise Hill and Oyu Tolgoi

AngloGold (AU) (HMY) (RTP) (DISH) (HON) (K) Ratings, Price Targets

AngloGold Ashanti (NYSE: AU), Harmony Gold Mining (NYSE: HMY), Rio Tinto plc (NYSE: RTP), DISH (NASDAQ: DISH), Honeywell International Inc. (NYSE: HON) and Kellogg (NYSE: K) ratings and price targets.

AngloGold Ashanti (AU) was upgraded by Goldman Sachs (NYSE:GS) to a “Neutral” rating.

Harmony Gold Mining (HMY) was upgraded by Goldman Sachs to a “Neutral” rating.

Rio Tinto (RTP) was upgraded by Goldman Sachs to a “Buy” rating.

Brean Murray reiterated its "Buy" rating on DISH (DISH).

Honeywell International Inc. (HON) had its price target raised by Oppenheimer (NYSE:OPY) from $62.00 to $65.00. They have an “Outperform” rating on the company.

Kellogg (K) was downgraded by JPMorgan Chase & Co. (NYSE:JPM) from an “Overweight” rating to a “Neutral” rating.

Rio Tinto (RIO) (POT) (COG) (KWK) (MON) (NGLS) Ratings, Price Targets

Rio Tinto (NYSE: RIO), Potash (NYSE: POT), Cabot Oil & Gas (NYSE: COG), Quicksilver Resources (NYSE: KWK), Monsanto (NYSE: MON) and Targa Resources Partners LP (NASDAQ: NGLS) ratings and price targets.

Potash (POT) had its “Buy” rating reiterated by Goldman Sachs (NYSE:GS).

Citigroup (NYSE:C) initiated coverage on Cabot Oil & Gas (COG). They placed a “Buy” rating on the company.

Citigroup initiated coverage on Quicksilver Resources (KWK). They placed a “neutral” rating on the company.

Macquarie initiated coverage on Monsanto (MON). They placed a “Neutral” rating on the company.

Morgan Keegan initiated coverage on Targa Resources Partners LP (NGLS). They placed an “Outperform” rating and a price target of $46.00 on the company.

Barclays Capital (NYSE:BCS) initiated coverage on Rio Tinto (RIO) . They placed an “Equal Weight” rating on the company.

Rio Tinto (RIO) (PDM) (SBRA) (SJR) (TCO) (TEVA) Downgraded

Rio Tinto (NYSE: RIO), Piedmont Office Realty Trust (NYSE: PDM), Sabra Healthcare Reit (NASDAQ: SBRA), Shaw Communications Inc. (NYSE: SJR), Taubman Centers Incorporated (NYSE: TCO) and Teva Pharmaceutical Industries Ltd (NASDAQ: TEVA) were downgraded by analysts.

Piedmont Office Realty Trust (PDM) was downgraded by Stifel Nicolaus from a “Hold” rating to a “Sell” rating.

Rio Tinto (RIO) was downgraded by Goldman Sachs (NYSE:GS) to a “Neutral” rating.

Sabra Healthcare Reit (SBRA) was downgraded by JMP Securities from an “Outperform” rating to a “Market Perform” rating.

Shaw Communications Inc. (SJR) was downgraded by Bank of America (NYSE:BAC) from a “Buy” rating to a “Neutral” rating.

Taubman Centers Incorporated (TCO) was downgraded by ISI Group from a “Buy” rating to a “Hold” rating.

Teva Pharmaceutical Industries Ltd (TEVA) was downgraded by Piper Jaffray (PJC) from an “Overweight” rating to a “Neutral” rating. They have a price target of $45.00 on the company.

Rio Tinto (RIO) (CNQR) (UPS) (DHR) (MTB) (EVEP) Price Targets Changed

Rio Tinto (NYSE: RIO), Concur Technologies, Inc. (NASDAQ: CNQR), United Parcel Service, Inc. (NYSE: UPS), Danaher Co. (NYSE: DHR), M&T Bank Co. (NYSE: MTB) and EV Energy (NASDAQ: EVEP) have price targets adjusted by analysts.

Rio Tinto (NYSE: RIO) had its price target lowered by Dahlman Rose to $115.00.

Concur Technologies, Inc. (CNQR) had its price target lowered by BMO Capital Markets from $47.00 to $40.00. They have a “Market Perform” rating on the company.

United Parcel Service, Inc. (UPS) had its price target lowered by HSBC (NYSE:HBC) from $90.00 to $80.00. They have an “Overweight” rating on the company.

Danaher Co. (DHR) had its price target lowered by Stifel Nicolaus to $59.00.

M&T Bank Co. (MTB) had its price target lowered by JPMorgan Chase & Co. (NYSE:JPM) from $100.00 to $85.00.

EV Energy (EVEP) had its price target raised by RBC Capital from $71.00 to $80.00. They have an “Outperform” rating on the company.

Miners (FCX) (RIO) (VALE) (TCK) Trade Mixed

Freeport-McMoRan (NYSE:FCX), Rio Tinto (NYSE:RIO), Vale (NYSE:VALE) and Teck Resources (NYSE:TCK) traded mixed on Thursday as commodity prices were pressured down.

Gold for June delivery closed down $3.40, or 0.2 percent, at $1,492.40 a troy ounce on the Comex division of the New York Mercantile Exchange.

The ICE Futures' dollar index was down 0.5 percent at 75.106. The U.S. dollar was down against most of its major peers at the end of trading Thursday.

Silver prices ended the session down. July delivery for silver fell 16.5 cents, or 0.5 percent, to $34.932 a troy ounce.

Extremely bad news on Obama's economy pressured the commodity sector.

July contracts had copper falling 5.25 cents to settle at $4.0525 a pound and platinum dropped $10.90 to $1,769 an ounce. June palladium settled down $9.05 at $728.15 an ounce.

Questions as to the sustainability of iron ore prices over the long term are a question for the diversified miners, although in the short term that won't be an issue. That comes from expectations China's demand for steel will slow down and more iron ore coming into the market.

Housing sales and manufacturing data revealed an ongoing weak and fragile American economy.

Rio Tinto closed Thursday at $67.41, dropping $0.81, or 1.19 percent. Vale ended the session at $30.45, gaining $0.13, or 0.43 percent. Teck Resources closed at $49.96, falling $0.24, or 0.48 percent. Freeport-McMoRan closed at $47.97, down $0.65, or 1.34 percent.

Miners Vale (VALE) (FCX) (RIO) (TCK) Trade Up

Shares of diversified miners Freeport-McMoRan (NYSE:FCX), Rio Tinto (NYSE:RIO), Teck Resources (NYSE:TCK) and Vale (NYSE:VALE) all traded up on Wednesday as gold, silver and most other commodity prices climbed on the day.

June gold climbed $15.80 to $1,495.80 per troy ounce, a 1.1 percent gain on the Comex division of the New York Mercantile Exchange. The less traded May contract was up $15.80, or 1.1 percent, to $1,495.60 a troy ounce.

The silver contract for May delivery gained $1.61, or 4.8 percent, to $35.10 a troy ounce.

A weaker dollar was the major catalyst for gold and silver specifically, and commodities in general on Wednesday.

Benchmark West Texas Intermediate crude for June delivery was up $3.19, or 3.3 percent, to settle at $100.10 a barrel on the New York Mercantile Exchange.

Brent crude rose $2.31 in London, or 2.1 percent, to settle at $112.30 a barrel on the ICE Futures exchange.

The U.S. dollar index, which measures the dollar against a basket of six currencies, traded at 75.438, down a little from 75.441 late Tuesday. That was also a factor in gold and silver prices going up.

July platinum was $18.90 higher to end at $1,779.90 per troy ounce, while June palladium jumped $22.95 to $737.20 per troy ounce.

For base metals, July copper rose 11 cents to $4.11 per pound in New York trade, while three-month contracts for the metal were $262 higher to $9,061 per ton on the London Metal Exchange.

Aluminium inventories increased in LME warehouses, adding 1,325 tons to a new record high of 4.71 million tons. Even so, three-month contracts for aluminium still were up $55 to $2,556 per ton.

Zinc was up $97 to $2,188 per ton in London and lead was $136 higher to $2,445 per ton.

Freeport-McMoRan (FCX) closed Wednesday at $48.62, gaining $1.79, or 3.82 percent. Vale closed at $30.32, up $0.46, or 1.54 percent. Rio Tinto ended the session at $68.22, rising $0.83, or 1.23 percent. Teck Resources closed at $50.20, jumping $2.08, or 4.32 percent.

Coverage on (NRG) (OLP) (RIO) (TAL) Initiated

Coverage on NRG Energy, Inc. (NYSE: NRG), One Liberty Properties (NYSE: OLP), Rio Tinto (NYSE: RIO) and TAL International Group, Inc. (NYSE: TAL) initiated by analysts.

Dahlman Rose initiated coverage on NRG Energy, Inc. (NRG). They placed a “buy” rating and a price target of $29.00 on the company.

Compass Point initiated coverage on One Liberty Properties (OLP). They placed a “buy” rating and a price target of $17.00 on the company.

RBS initiated coverage on Rio Tinto (RIO). They placed a “buy” rating on the company.

Wells Fargo & Co. (NYSE:WFC) initiated coverage on TAL International Group, Inc. (TAL). They placed an “outperform” rating on the company.

Miners (HMY) (GG) (EGO) (GFI) (RIO) Trade Down as Gold Falls

Even though several events should have helped support gold prices on Wednesday, that wasn't the case, as Harmony Gold Mining (NYSE:HMY), Goldcorp (NYSE:GG), Eldorado Gold Corporation (NYSE:EGO), Gold Fields (NYSE:GFI) and Rio Tinto (NYSE:RIO) closed down, with gold for June delivery, the most actively traded contract, falling $25.10 to $1,515.30 an ounce.

Silver prices are the story for commodities and gold at this time, as the plunge in prices is dragging down the overall commodity sector, as traders sell off holdings to take some profits.

Silver fell $3.197, or 7.5 percent, to settle at $39.388 an ounce. That's the third straight day of losses after silver closed in on $50 an ounce mark last week.

Silver for July delivery dropped $2.820, at $39.765 per troy ounce.

The U.S. dollar index lost 0.15 percent to $73.01, dropping from Tuesday's 73.127 close. The dollar index is down 7.5 percent so far in 2011.

Against the euro, the dollar plunged to its lowest level Wednesday since December 2009.

Other than the fall of the dollar, other factors that would have normally supported gold was the underreported decision by the European Union to bail out Portugal for close to 78 billion euros.

Also largely ignored was the ADP Employment Change report for April, which showed the private sector missed the anticipated addition of 200,000 jobs, being able to only generate 179,000 for the month.

Also of note Wednesday was the Institute for Supply Management’s services-sector index, which was weakened more than expected in April, confirming that American growth is slowing.

Goldcorp (GG) closed Wednesday at $50.78, dropping $0.40, or 0.78 percent.

Rio (RIO) Really Want Alcoa (AA)?

The rumors are again making the rounds that Rio Tinto (NYSE:RIO) may be interested in acquiring Alcoa (NYSE:AA).

Speculation circulating is Rio Tinto has secured a $25 billion syndication loan to make the purchase.

Traders bid up the share price of Alcoa to $17.74, gaining $0.52, or 3.02 percent, as of 12:09 PM EDT. Options activity also jumped on the rumor, specifically $18 strike calls that expire later in May, as well as June $18 calls. Also attracting attention were the May $19 and June $19 strike calls.

It's doubtful Rio would really be interested in exposing itself to even more aluminum, as the future is far from clear on the supply and demand outlook, and by extension pricing strength and margins.

Rio would probably also face intense regulatory scrutiny because of its past acquisition of Alcan.

Either way, you never know what a company may do. But the idea of aluminum being a major growth metal and market isn't convincing at this time.

L&L Energy (LLEN) (YZC) (WLB) (RIO) Close Up as Thermal Coal Demand Explodes

Growing demand from China and India for thermal or steam coal, and to a lesser degree, coking or metallurgical coal, is driving the price of coal up, as well as the share price those coal companies and companies with coal exposure like L&L Energy (NASDAQ:LLEN), Yanzhou coal mining Co. (NYSE:YZC), Westmoreland Coal Company (AMEX:WLB) and Rio Tinto (NYSE:RIO), who provide the needed energy source.

IN 2011 India is expected to import about 60 million tons of thermal coal, a 17 percent increase over 2010's 47 million tons. China is estimated to be looking at importing about 70 million tons of thermal coal in 2012.

Thermal coal is used to generate electricity while coking coal to run steel plants.

Overall, thermal coal demand is estimated to surpass 7 billion tons in 2011, according to U.S. coal producer Peabody Energy Corp. (NYSE:BTU).

Thermal coal will probably grow faster than oil and gas in 2011, increasing over 30 percent to a record, as demand from China and India soars and Japan adds to its imports to make up for nuclear power lost after the recent earthquake.

Daniel Brebner, an analyst for Deutsche Bank (NYSE:DB) in London, said in the early part of April, that thermal coal will average $132 a ton this year and $145 in 2012. Those prices are close to what other analysts have also projected for thermal coal prices going forward.

Head of Rio Tinto Group’s (NYSE:RIO) Coal & Allied Industries Ltd. (CNA) unit, Chris Renwick, said, “We expect strong demand growth in China and India will continue throughout 2011 and the long-term prospects are also bright. Our traditional Asian markets have returned to pre-global financial crisis demand levels.”

Rio Tinto closed Thursday at $73.14, gaining $1.30, or 1.81 percent. Westmoreland Coal Company ended the day at $17.05, up $0.37, or 2.22 percent. Yanzhou coal mining Co. closed at $37.99, jumping $0.29, or 0.77 percent. L&L Energy closed the session at $7.28, rising $0.22, or 3.05 percent.

Diversified Miners (RIO) (TCK) (VALE) (BHP) Close Down as Base Metals Drop

Base metals dropped in Monday trading putting pressure on diversified mining giants Rio Tinto (NYSE:RIO), BHP Billiton (NYSE:BHP), Vale SA (NYSE:VALE) and Teck Resources, (NYSE:TCK), which all closed down.

Three-month copper on the London Metal Exchange dropped to $9,207 a ton, its lowest since March 17. It closed at $9,225 a ton from Friday's close at $9,450.

Stocks of copper in LME warehouses last rose 1,350 tons to 451,775 tons, their highest since June 2010.

Also weighing on metals, the U.S. dollar was stronger against a basket of major currencies, weakening metals demand from non-U.S. investors. European equities were down on increased talk that Greece will be forced to restructure its debt and uncertainty over a bailout for Portugal which dampened risk appetite.

Aluminium closed $2,674 from $2,690 a ton.

Zinc ended at $2,325 from $2,398 a ton. Stocks of the metal rose 50 tons to a seven-year high of 764,300 tons.

Battery material lead was down close to five percent to its lowest in over a month at $2,520 a ton. It closed at $2,528 from $2,651 a ton, while tin finished at $32,350 from $33,100 a ton and nickel ended at $25,500 a ton from $26,155.

Platinum was lower by 0.2 percent at $1,779.99 an ounce, while palladium fell 3.3 percent to $735.22.

BHP closed Monday at $97.98, falling $1.82, or 1.82 percent. Rio Tinto closed at $69.09, down $1.82, or 2.57 percent. Teck Resources ended the session at $50.68, losing $1.26, or 2.43 percent. Vale closed at $32.05, dropping $0.73, or 2.23 percent.

Diversifieds BHP (BHP) (VALE) (RIO) (TCK) (FCX) Trade Mixed

Shares of diversified miners such as BHP Billiton (NYSE:BHP), Rio Tinto (NYSE:RIO), Vale SA (NYSE:VALE), Teck Resources (NYSE:TCK) and Freeport-McMoran (NYSE:FCX) were trading mixed Thursday, metals prices moved in various directions.

In base metals trading, May copper dropped 1.05 cents to settle at $4.284 a pound, July platinum increased $18.40 to $1,795.60 an ounce and June palladium was up $8.95 to $774.25 an ounce. May copper fell 1.05 cents to settle at $4.284 a pound.

Iron ore demand is expected to remain tight over the medium term, and over the long term should jump in response to the rebuilding needs coming from the consequences of the earthquake in Japan.

Gold for June delivery rose $16.80 to settle at $1,472.40 an ounce on the Comex division of the New York Mercantile Exchange.

Spot gold was up 1.4 percent to $1,474.30 an ounce, closing in on its record $1,476.21 set on Monday. Silver rose $1.427, or 3.6 percent, to $41.66 an ounce.

The collapsing U.S. dollar, tightening in China, sovereign debt crisis in Europe, unrest in the Middle East, increasing inflation and consequences of the Japanese earthquake are just some of the negative catalysts affecting the price movements.

The U.S. dollar was close to session lows, resulting in a further impetus to gold. The U.S. currency traded as low as 74.617, its lowest level since December 2009.

Teck Resources closed Thursday at $52.30, falling $0.59, or 1.12 percent. Rio Tinto closed at $71.70, up $0.04, or 0.06 percent. Vale SA ended the day at $32.65, up $0.64, or 2.01 percent. BHP Billiton closed at $100.42, rising $0.17, or 0.17 percent. Freeport-McMoran closed at $51.93, dropping $0.38, or 0.73 percent.

Teck (TCK) (FCX) (VALE) (RIO) Fall as Base Metals Drop

Even though Gold and silver prices were up moderately Wednesday, diversified miners like Teck Resources Limited (NYSE:TCK), Freeport-McMoran (NYSE:FCX), Vale (NYSE:VALE) and Rio Tinto (NYSE:RIO), closed down on the day, as most base metals fell in price.

July platinum added $2.90 to $1,777.20 a troy ounce, but June palladium fell $4.80 to $765.30 a troy ounce.

Among base metals, May copper was down 9 cents to $4.30 a pound in New York trade, while three-month contracts were $115 lower to $9,515 a ton on the London Metal Exchange after stockpiles in LME-monitored warehouses added another 3,225 tons throughout the day.

Tin was also down in London trade, falling $300 to $32,250 a ton, while nickel dropped $450 to $26,250 a ton.

On Wednesday gold prices closed at $1455.60 an ounce. The Silver price for the May contract was higher by .43 percent at 40.24 an ounce.

The collapsing U.S. dollar continues to be a big factor, although it gained in strength near the end of trading Wednesday. Other factors are tightening in China, sovereign debt crisis in Europe, unrest in the Middle East, deepening food and fuel inflation and the consequences of the Japanese earthquake in the auto and tech sectors, among others.

Rio Tinto closed Wednesday at $71.66, dropping $0.47, or 0.65 percent. Teck Resources Limited closed at $52.89, down $1.03, or 1.91 percent. Freeport-McMoran closed at $52.31, falling $1.14, or 2.13 percent. Vale closed at $32.39, declining $0.58, or 1.76 percent.

Rio (RIO) Says Iron Ore, Coal Production Down in 1Q

Not unexpectedly, Rio Tinto (NYSE:RIO) announced coal and iron ore production in the first quarter fell as a result of the heavy rains which hampered mining in Australia. Also affected was uranium output.

Production of iron ore fell from 50.1 million tons the prior quarter to 41.9 million metric tons. Hard coking-coal production dropped to 1.6 million tons, a 29 percent decline.

Full year earnings for Rio and major competitor BHP Billiton (NYSE:BHP) are expected to come under some pressure from the slowdown.

Evens so, Rio estimates it'll produce about 191 million tons of iron ore in 2011, up from the 184 million tons produced in 2010.

Paul Galloway, a Sanford C. Bernstein Ltd. analyst, wrote today in a note to clients, “Given this relatively robust full year production guidance, we view the substantial miss in iron ore production as a largely one-off occurrence and would expect to see improvement in the short-term. The overall impact on full-year 2011 earnings estimates in the market may be smaller than might initially be expected.”

Chief Executive Officer Tom Albanese said concerning production, “Our Australian coal, iron ore, uranium and alumina operations were affected by the extreme weather in the first quarter. Most are recovering and are benefiting from continued strong prices.”

Rio was trading in New York at $71.22, falling $0.91, or 1.26 percent, as of 2:15 PM EDT.

Rio Tinto (RIO) in New Deal with India

Rio Tinto (NYSE:RIO) has received permission to launch mining activities in India, with the government granting a proposal for a new agreement.

State-run Orissa Minerals Development Company (OMDC), has been in discussions with Rio Tinto for a joint venture in the state for a long time.

Orissa state steel and mines minister Raghunath Mohanty confirmed that a new agreement is now in place.

The deal entails the entire value chain, from prospecting and development to extraction. OMC will use Rio Tinto's expertise for mining its reserves in Orissa.

A joint venture company named Rio Tinto Orissa Mineral was formed for the exploration of 15 million tons of iron ore per year from the Gandhamardan and Malangtoli mines.

OMC has access to almost 206 million tons of iron ore reserves and 44 million tons of manganese ore reserves spread across six mines aggregating 4,365.262 hectares in Barbil of Orissa's Keonjhar district.

Rio Tinto also plans to invest a significant amount in Madhya Pradesh for mining diamonds there.

Rio Tinto had begun exploring for diamonds across a number of sites in India in the mid-1990s. In 2004, the company had located some finds in the Bunder area.

During drilling and prospecting at Bunder in Madhya Pradesh, the company discovered a web of pipes which it claims could hold the biggest diamond find in the world in the last decade.

Analysts say this translates to an annual value of roughs in the region of $300 million, assuming a life span of 15 years for the mine.

Rio Tinto closed in New York Thursday at $72.42, falling $0.55, or 0.75 percent.

Teck (TCK) (BHP) (FCX) (RIO) Will Soar on Copper Rebound

While there will be a temporary glut in the copper supply in the early part of 2011, as the year goes on, expectations are things will tighten up and after a period of correction, prices will soar, driving up shares of mining giants like BHP Billiton (NYSE:BHP), Freeport-McMoRan (NYSE:FCX), Rio Tinto (RIO) and Teck Resources (NYSE:TCK).

Part of the problem at this time is the poor ore grades the copper giants are hitting, which in the longer run will increase costs, but also the price of copper as the market tightens on the lower supply.

The other good news for the miners with significant copper exposure is these conditions should continue on over the next several years, as demand continues to be strong.

Along with declining ore grades, other factors include delays to mine expansions and disruption from strikes.

The scenario will change when the giant copper deposit at Oyu Tolgoi mine in Mongolia goes online in 2013, where about 450,000 tons of copper is expected to be produced annually. Those benefiting from that will be Ivanhoe Mines (NYSE:IVN) and Rio Tinto.

For now, there will be a temporary copper glut and then everything will begin to tighten as the year goes on, pushing prices up as high a 18 percent, according to analysts.

Alcoa (AA) (BHP) (RIO) (ACH) to Gain from High Copper Prices

Companies with significant exposure to aluminum, like Alcoa (NYSE:AA), Rio Tinto (NYSE:RIO), BHP Billiton (NYSE:BHP) and Chalco (NYSE:ACH) and Rusal, should enjoy support as producers look for alternatives for certain products which can substitute aluminum for copper.

Aluminum is in general accepted as a cheaper substitute to copper in many applications, and many manufacturers are seriously considering switching to aluminum with copper reaching all-time high prices early this year.

Alcoa's products are used in a wide variety of products from aircrafts and automobiles to commercial transportation and packaging. The company also sells non-aluminum products like aerospace and industrial fasteners.

Copper is primarily used in electrical appliances and construction. About 65 percent of copper usage is attributable to electrical appliances because it is an excellent conductor of electricity. Construction applications make up the bulk of the remaining share of copper usage in which the metal is often used for roofing and plumbing as well as in automobile and ship manufacturing.

Copper prices are currently at an all-time high, above $4.5 a pound. In comparison, aluminum is priced at about $1.1 a pound. Given the costs of retooling manufacturing processes and the extra aluminum it takes to conduct the same amount of electricity as copper, it often becomes more economical to use aluminum instead of copper if copper prices rise above $3.50 a pound.

Alcoa closed Tuesday at $17.49, gaining $0.25, or 1.45 percent.




Source

BHP (BHP), RIO (RIO) Jump on Rising Commodity Prices

Rising gold, silver and copper prices are pushing up the share price of diversified miners BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RIO), as safe haven status and growing copper demand offers the commodities support and growth.

Copper demand and prices are rising on the fact that Japan will need a tremendous amount to rebuild the country. Other commodities like aluminum and steel will also generate strong demand over time.

Gold is up on the various geo-political and economic crises around the world, with the never-ending sovereign debt crisis in the EU again adding fuel to the fire.

Silver continues to rise on an alternative to gold as well as demand as an industrial metal.

BHP was trading at $ 90.94, gaining $0.92, or 1.02 percent, as of 2:20 PM EDT. Rio Tinto was at $68.57, up $1.05, or 1.56 percent.