Is Copper a Viable Investment Metal?

One of the many hobbies I have is buying and selling antiques. I don’t make a whole a lot of money doing, it’s more about testing my ability to find a good deal or determine how well I can read people and markets. Which of course is why it’s a hobby and not a job. Recently when exploring a few antique shops, I kept seeing copper bullion in 1oz rounds and 1lb bars. The prices on them were outrageous. In most cases the 1lb bar would sell from $18-$20 a piece. Naturally I had to explore this.
Currently copper trades at a little over $3/lb, which makes that mark up all the more ludicrous. I figured if I wanted to invest in copper I should look online and see what is happening there as these local prices are surely mistaken. Lo and behold, they are, but sadly not by much. On average you pay almost two times the value of a copper bar, which makes little sense to me. If you don’t believe me (you should, but I won’t judge) here are a few screen captures from various sites including ebay.

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I must say the ebay image is the most surprising. Since it is an open market I expect the price on these to match spot plus ebay fees with maybe a 3-5% markup, making them around 4.00/lb at the highest. Nope, 8.50. Same as all the online retailers. Also oddly enough, if you are in the market for copper bullion, Provident Metals seems to have the most reasonable prices available online at 5.70/lb.
So what is it that makes copper so high? Is there a shortage? Is there some major conspiracy I missed out on about the price of copper blowing up? Not surprisingly the answer to both of those questions is no. Turns out there is more copper available to us than we would ever need (which explains the price), and while it serves as an industrial metal, its uses are limited which also keeps the price down.
At this point I am still at a loss for the outrageous hikes in prices for copper bullion which for me means this is not so much an investment as it is a money sink. When looking at the five year chart on it the highest it has reached is around 4.50/lb which means in the best case scenario you’re only paying double its worth. More likely than not you would lose 2/3 of your investment immediately after purchase with very little hope of getting it back. That’s basically worse than buying a new car. As far a I can see, this seems to be one of the worst investments someone could make. But here again, I’m still new to this, maybe I am missing something after all.
-D

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3 Responses to Is Copper a Viable Investment Metal?

  1. One of your readers asked us why copper bullion was so expensive, so we thought we would share our answer with you as well. We actually get that question quite a bit, so we put together a blog post a while back on that specific topic. Thanks.

    http://www.blog.providentmetals.com/gold-and-silver-bullion-investing/why-are-premiums-for-copper-bullion-so-high.htm

  2. One of your readers asked us why copper bullion was expensive, so we thought we would share our answer with you as well. We actually get that question quite a bit, so we put together a blog post awhile back on that specific topic. Thanks.

    http://www.blog.providentmetals.com/gold-and-silver-bullion-investing/why-are-premiums-for-copper-bullion-so-high.htm

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