“Falling copper points to global pain”

The Globe and Mail has an article about scrap scavengers near Beijing. I’ve never heard of this ‘copper as a bellwether’ thing before, but here goes:

On the northeastern edge of sprawling Beijing, the hardscrabble neighbourhood of Dongxiaokou is some 20 kilometres from the glittering skyscrapers that provide this community’s livelihood. Here, virtually every scrap left over from a modern life – used computers and mobile phones, household appliances, furniture, clothing, even paper and plastic bottles – is collected, sorted, broken down and sold for cash.

Traditionally, copper has been among the most valuable materials for collection. But this week, after a month of sinking prices, no one is in a good mood.

“The prices are very unstable,” said Li Yibing, 42, a nattily dressed native of Henan province whose recycling business consists of a Chinese web portal advertisement, a mobile phone and a crew of about 10 men pedalling three-wheeled bicycle carts, who spend their days journeying all over Beijing to sort through other people’s cast-offs. One tonne of copper scrap now earns about 10,000 yuan ($1,580) less than it did a year ago, he said, and there are fewer places buying. “The factories which refine copper, some have stopped or have suspended working now,” he said.

Another recycler a few blocks from Mr. Li, who would only give his family name, Jiang, was morose as he sat at home, his mobile phone quiet. Also from Henan, he has been in the business for seven years, weathering the 2008 financial crisis even as many others gave up and went home.

But now, in a corner of his yard, metres-high piles of insulated copper and aluminum wire sit undisturbed, and he said this week has felt “almost the same” as three years ago. “We don’t recycle copper any more because the price has fallen too much. The price has been down for more than a month, so I’ve stopped,” Mr. Jiang said. “I don’t believe the price will go up. It’s a crisis now.”

The price of copper – used in everything from household goods to power grids – is considered a bellwether for measuring global demand and, more broadly, economic health. China is thought to be responsible for some 40 per cent of the world’s total copper demand, so any fall in the need for copper here can be interpreted as an economic slowdown with repercussions for the rest of the world.


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