Price of Copper is Down and Layoffs Are Up

Price of Copper is Down and Layoffs Are Up

Nearly 4 years ago the price of copper was at it’s peak. Today, it’s price is down 40%. Declining revenues are forcing many copper companies to implement layoffs. The story of the Ray Mine near Kearny, Arizona is representative of the small town struggle taking place in mining regions of the United States.

“Layoffs related to copper prices are a natural part of this mining town’s economic cycle of peaks and valleys. The current valley is coming off a spike originating in the mid-2000s. Mining companies began increasing production after seeing a growing use of the metal in electronic components and a surge in infrastructure investment in the U.S. and China. By 2011 though, demand from both countries dropped off significantly, leaving the market with more supply than demand could support.”

However, Dennis Hoffman, an economist at Arizona State University remains hopeful. He claims,

“There’ll be some rigs that are shut down because the price of oil came off a little bit, but are people stopping investing in oil? And the answer is no.”

Like oil, there will always be a demand for copper because it so important to construction and electronics manufacturing.

NPR: “With Prices Down And Layoffs Up, Copper Industry Still Looks To Grow”

Reuters: “METALS-Copper falls after strong U.S. jobs report boosts dollar”

Image: source