People in Greenlee and Graham counties may be unconcerned about the price of rice, a cup of tea or the cost of a movie ticket in China.
Not so when it comes to other matters in this Asian nation, whose economy continues to boom. What China does with copper has a resounding impact on the rest of the world, including the two faraway rural communities of Greenlee and Graham in the desert of southeastern Arizona.
At present there appears to be cause for local, as well as global, concern with what is happening in China: a possible significant decrease in its consumption of copper. That is making stock market analysts nervous about the fortunes of the always-volatile copper industry.
Copper prices dropped 2.6 percent last week on concern that consumption of copper, primarily in China, may falter. Copper futures for December delivery fell 3.6 cents, or 1.2 percent, to $2.957 a pound on the Comex division of the New York Mercantile Exchange.
According to the Bloomberg News Service, an industry watchdog, copper prices have seen a slight decline as rising inventories triggered a concern that the demand for copper is waning. The outlook is based on stockpiles monitored by the London Metal Exchange, which have jumped 1.5 percent to 379,825 metric tons as of Nov. 5.
Stockpiles are at their highest level since May 11, marking the biggest advance in six weeks.
"There's some uncertainty about future demand," Patrick Chidley, a New York analyst, said. "People are seeing this as an opportunity to take some profit."
Connecticut-based industry analyst Edward Meir said, "We are still wary about metals," adding that copper has "uninspiring fundamentals, typified by patchy demand and rising LME (inventory) stocks."
Earlier this year, copper rebounded from bargain basement prices to its current profitable level as Chinese imports surged. China put into effect its own form of an economic stimulus package presently being used in the United States in an attempt to revive a staggering economy.
While copper prices jumped this year after Chinese imports surged, inventories at warehouses monitored by the Shanghai Futures Exchange have soared 62 percent since Aug. 1, raising concern that demand from China is slowing.
Chinese consumption of copper has been a key factor for mining giants like Freeport McMoRan Copper & Gold Inc. When FMI acquired Phelps Dodge in 2007, FMI officials were quick to point to China's booming economy as a strong reason to have confidence in the copper market.
With the acquisition of PD, Freeport picked up the ore-rich Tanke Furugame mine in the Republic of the Congo and Morenci, PD's flagship mine in North America. With the deal came the new mine under development in Safford. Morenci and Safford are touted as having rich reserves that will carry mining for decades.
The rise of China saw an anemic copper market suddenly become flush with investors and capital. Morenci's work force jumped to about 4,000 and Safford was heavily hiring workers. Signs of economic trouble began appearing by August 2009, and by November the first in a series of layoffs began.
FMI announced in December that it would be laying off about half of its Morenci work force in March 2009. Safford was slated for major cuts. That is exactly what happened.
A small number of miners have been called to work in recent months, but FMI is tight-lipped about how many and in what capacity those people are employed. Unlike anything experienced with Phelps Dodge, FMI has gone so far as requiring the news media to submit questions in writing before it will provide any answers.
