The Great Copper Dragon of China

Copper is surging again. Why? Because China's economy continues to grow, and China's economy is devouring copper.

Here are some factoids...

• China is already the world's largest user of copper (it is also the largest consumer of steel and other metals including aluminum and zinc
• Last year, China's copper consumption jumped 9%. This year is anybody's guess because China keeps predicting its economy will slow down below 9% ... and it refuses to slow down!
• Gross domestic product rose 10.4% in the third quarter, after an 11.3% gain in the second quarter. Where's that slowdown that Morgan Stanley keeps predicting?
• Industrial production in China jumped 16.1% in September from a year earlier, after a 15.7% gain in August.
• Stockpiles of copper on the London Metals Exchange hit a 2-month low yesterday. There is now just enough copper on hand to equal three days of domestic production.
• Last month, Goldman Sachs Group forecast a global deficit of 101,000 tons of copper this year.

All in all, it sounds pretty bullish for copper to me. Our copper positions in Red-Hot Canadian Small-Caps are doing great (the ones in Red-Hot Asian Tigers aren't too shabby either) and copper is high on my shopping list.

Check out my new gold and energy blog at MoneyAndMarkets.com