Categories: Base Metals
Topics: General Base Metals

As copper soars, thieves extract a price

July 14, 2011

* States pass new laws in face of copper thefts trend

* Britain, France also see increase in copper heists

NEW YORK, July 13 (Reuters) - When thieves ransacked eight air conditioners in an apartment complex in the city of Mobile, Alabama, the culprits made off with $800 worth of scrap metal and left residents with $38,000 worth of damages.

"We've had copper robberies since forever," said Officer Christopher Levy of the Mobile Police Department, "but we've seen a spike so far this summer."

Record copper prices have caused a surge in U.S. copper thefts, plaguing law enforcement and local governments and prompting states to pass new laws.

"Since the beginning of the 2004 spike in copper prices, copper theft and copper prices have been directly linked," a 2010 U.S. Department of Energy study on copper wire thefts said.

The price of the red metal traded in New York HGc1 rallied to its highest in nearly three months during the first week of July, placing it within 5 percent of its all-time high of $4.65 per pound in mid-February this year. Even at roughly $4.39 on Wednesday morning, the price was still right for thieves.

Copper's historic price rise this year has been powered by strong global demand from China, which accounted for about 40 percent of this year's 21 million metric tons of global consumption. Prices have also been driven up by a widely expected supply shortfall for the rest of this year into 2012.

With these prices, thievery of the metal is not just a U.S. problem: copper thefts increased 85 percent in London last year according to New Scotland Yard. France has suffered from a similar problem with the number of thefts rising 123 percent year-on-year in the first quarter of 2010, according to police figures.

EXPENSIVE DAMAGES

Copper, valued because it is an excellent conductor of electricity, works for almost all types of wiring and is used by most utilities, giving thieves plenty of targets. Wired lines and substations are especially popular theft zones, often cutting off electricity or telephone access and running up millions of dollars in damage.

Michigan utility company DTE Energy (DTE.N) reported thefts costing the company $10 million in 2007. Pacific Gas & Electric Company (PCG.N) was spending more than $1 million per year in damages, the Department of Energy reported.

"You can get a few thousand to tens of thousands worth of damage" in any one incident, Verizon Communications (VZ.N) spokesman Lee Gierczynski said.

Thieves also have stripped copper and other materials from houses left vacant by the rash of mortgage foreclosures across much of the country.

Some states have passed laws to stem copper thefts in recent years, after the Copper Theft Prevention Act failed to reach the floor for a vote in the U.S. Congress in 2008. At least 33 states have copper theft laws, South Carolina being the most recent after passing its law in late June.

"This was a huge communitywide problem," Minority Leader Harry L. Ott Jr. of the South Carolina House of Representatives said of the law that takes effect in August. His own district had suffered from irrigation and air-conditioning damages.

The new law prohibits recyclers from paying cash for copper, with the aim to make copper less attractive to drug addicts trying to make a quick dollar.

"We wanted to take the incentive to steal out of the equation," Ott said.

Copper's historic price rise this year has been powered by strong global demand from China, which accounted for about 40 percent of this year's 21 million metric tons of global consumption. Prices have also been driven up by a widely expected supply shortfall for the rest of 2011 into 2012.

(Reporting by Paula Rogo; Editing by Daniel Trotta and Vicki Allen)