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Politics : Sioux Nation -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (64483)	4/18/2006 12:21:19 AM
From: Wharf Rat	Read Replies (1) \| Respond to of 361700

The Australian — FT business Pennies for scrap: it's good cents Kevin Morrison,London April 12, 2006 IT could soon be worthwhile for Americans to melt down their pennies for scrap, if zinc and copper prices continue their current rate of increase. Copper prices have risen 30 per cent this year, and zinc is up 55 per cent - a rise of about $US550 a tonne in a little more than three weeks. Another rise of the same magnitude would make the metal content in the US 1c coin worth more than its face value. There are 160 pennies - also known as a 1c coin - in a pound, worth a face value of $US1.60. With each penny made of 97.5 per cent zinc and 2.5 per cent copper, based on current prices the metal value is worth about $US1.36. Therefore another 25c a pound rise in zinc, or about $US551 a tonne, would see the metal value of the US penny worth more than the monetary value. Market analysts do not rule out such a rise in the zinc price. "Zinc prices have already risen further than what most people had ever thought but that is not to say there cannot be further gains," said Ingrid Sternby, metals analyst at Barclays Capital. "Could we see another $US500 on zinc? It's possible," she said. But Ed Yardeni, chief investment strategist at US fund manager Oak Associates, who drew attention to the penny's rising scrap value, said: "Don't bother melting the pennies just yet. "However, at the rate that metal prices have soared since the end of last year, there might soon be an arbitrage play between pennies and zinc," Mr Yardeni said. Copper and zinc on Monday extended their record-breaking run to reach new highs of $US5960 and $US2930 a tonne respectively amid a sustained hot streak among a series of other commodities. Gold and silver each reached 25-year and 23-year highs of $US598.10 and $US12.57 a troy ounce respectively. Meanwhile, Brent crude oil futures on Monday hit a record high of $US68.93 a barrel. However, some analysts cautioned that the current commodities boom was unlikely to last forever. Simon Hayley, senior international economist at Capital Economics, said the price boom would start to fade by the end of the year as US growth for 2007 was likely to slow. In any case, Europeans would not be facing the same dilemma as their US counterparts should prices continue to soar. Euro coins are mostly made of steel, which would require a doubling in the steel price before it would become economic to melt the 1c euro coin. theaustralian.news.com.au