As copper prices soar, looters nationwide are attacking electrical grids, telecom towers, transportation hubs, and emergency-service generators. How one Dallas police unit is cracking down.

Copper, a metal with high thermal and electrical conductivity, is the essential ingredient in power lines, heating and cooling pipes, and grounding wires-the basic components of the modern world. If power lines get stolen, roads go dark. If cell towers get raided, calls get dropped. If electrical substations are knocked over, power goes out just about everywhere, including at police stations.

All of that happened in Dallas: Between 2002 and 2007, reported metal thefts spiked almost 1,000 percent, to 3,339 per year. That number dipped in 2008 but was still around 2,400. Using a toolkit of wrenches, work gloves, and power saws, crooks were dismantling the city-even prying bouquet vases out of local graveyards. "They used to say thieves would steal anything not nailed down," says Dwyer, who ran metal theft field operations from spring 2007 until late fall 2010. "Now even if it's nailed down they want it."

Since 2001 the price of copper has gone from less than $1 per pound to about $4 per pound on the Comex division of the New York Mercantile Exchange (CME). In response, looters and scavengers nationwide are stealing copper where they can. Within the last three years, copper thieves have disabled 130 cell tower sites across 17 jurisdictions in eastern Virginia and North Carolina. They stripped the wire from an airplane control tower in Ohio, endangering in-flight communications. They scuttled the irrigation system of Pinal County, Ariz., causing $10 million in damage and ruining a harvest. In Indianapolis, gutted refrigeration systems cost the state's largest food bank $400,000 in spoiled rations. In Jackson, Miss., thieves stole the copper from five storm sirens, which then failed to warn residents of an incoming tornado. In Kansas City, Mo., power outages due to stolen wire caused a credit union to freeze bank accounts, while a separate group allegedly used a backhoe to excavate 18,000 feet of backup power lines worth at least $500,000. In western Nevada, bandits on four-wheelers took out signal and control systems from Union Pacific (UNP) and Amtrak rail lines. In Minneapolis and Cincinnati, police say gangs use foreclosure lists like treasure maps, looting pipes from hundreds of homes, some of which exploded from gas leaks.

David Fuller's view It is a sign of the times.

Here is an informative report on copper. Page 2 suggests that copper could rise to between $5 and $7 in the next few years. That may seem like a heady forecast given the invisible ceiling that copper (monthly & weekly) has encountered on brief forays above $4 since 2006.

However, of the most important commodities copper is probably closest to the centre of Fullermoney's Supply Inelasticity Meets Rising Demand theme. China currently imports nearly 60 percent of its copper and that figure is likely to rise. Reserves of copper still in the ground within politically stable regions of the world are declining. The costs and risks of developing new 'green field' sites in politically unstable regions, such as Afghanistan, are rising.

The only medium-term factor which would reinforce copper's ceiling just over $4 that I can envisage is considerably slower global GDP growth in Asia, which I do not envisage anytime soon. Over the longer term, I think that even if copper does not price itself out of some usages, the eventual commercial production of nanoscopic materials such as graphene will prove to be superior substitutes. However it is still too soon to say when graphene will become available in sufficient quantities and at commercial prices.


Meanwhile, copper appears to be consolidating earlier gains during a process of at least partial mean reversion towards its rising 200-day moving average. Copper has moved back into a slight backwardation, indicating that supplies of the metal for immediate usage have tightened. I may reopen a long position in Comex copper futures.