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Thoughts on copper bullion as an investment?


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Hello all,

What are your thoughts on copper bullion as an investment?

I’ve got a total of 360oz of copper bullion now & when I uploaded the below video today talking about this topic it got mixed reactions. 

Do you think copper bullion has a place in the portfolio or is it a waste of money?

 

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Only worth collecting it as scrap metal. I've mentioned this in a similar thread before, but a mate of mine collects scrap copper and brass. He picks it up for free. He melts it in to uniform ingots and has started to stack it in one of his out building's he uses for his office. He drew the design on paper and each ingot is a pixel. Its a welsh dragon. He's part way through it. The pic looks awesome and the wall is getting there. 

Unless you intend on doing something like this I don't think it's worth it. The intrinsic value just isn't there

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1 hour ago, Mothballjim said:

Hello all,

What are your thoughts on copper bullion as an investment?

I’ve got a total of 360oz of copper bullion now & when I uploaded the below video today talking about this topic it got mixed reactions. 

Do you think copper bullion has a place in the portfolio or is it a waste of money?

So, as I would ask anyone buying gold, silver, platinum, or palladium, particularly if as an investment, what percentage premium did you pay for it, firstly excluding VAT, then inclusive of VAT?

😎

Chards

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I think it depends on what your investing it for and premium paid. Remembering that copper is less dense than silver (so takes up more room for the same weight) 1kg of silver is £634, compared to 1kg of copper £6.92. Meaning meaning you would (for the sake of simple maths) 100 times the amount of copper to equate to the same silver. So size and storage could definitely become a problem. In fact it's the very reason alot of people switch from silver to gold at a certain point, size weight (and value difference). The only difference here is ots 100 times worse.

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10 minutes ago, ShineyMagpie said:

compared to 1kg of copper £6.92

He paid £150 for it, so it's mostly premium rather than metal. While that does increase the value density, excepting an highly unrealistic rise in copper prices, it's not really a metals investment so much as a collectibles investment. (And if that unrealistic rise does happen I'm sure there are more efficient ways of obtaining exposure to it.) So far as a collectible goes there is only one recent UK sale of a similar bar (Geiger 5kg copper) on eBay, at a price slightly higher than he paid (£155 plus post vs £150 inc post). (It's important to look at sold items, not just asking prices.) So he might be able to flip it for a small profit but it's such a small market that reliably estimating value on it is hard.

Edited by Anteater
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48 minutes ago, ZRPMs said:

Only worth collecting it as scrap metal. I've mentioned this in a similar thread before, but a mate of mine collects scrap copper and brass. He picks it up for free. He melts it in to uniform ingots and has started to stack it in one of his out building's he uses for his office. He drew the design on paper and each ingot is a pixel. Its a welsh dragon. He's part way through it. The pic looks awesome and the wall is getting there. 

Unless you intend on doing something like this I don't think it's worth it. The intrinsic value just isn't there

I’d love to see a photo of this! What a cool idea!

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38 minutes ago, LawrenceChard said:

So, as I would ask anyone buying gold, silver, platinum, or palladium, particularly if as an investment, what percentage premium did you pay for it, firstly excluding VAT, then inclusive of VAT?

😎

The premium is very very high compared to the ‘spot price’ of copper but in terms of resale copper bullion products hold their crazy high premiums. Just not sure if this will always be the case!

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31 minutes ago, ShineyMagpie said:

I think it depends on what your investing it for and premium paid. Remembering that copper is less dense than silver (so takes up more room for the same weight) 1kg of silver is £634, compared to 1kg of copper £6.92. Meaning meaning you would (for the sake of simple maths) 100 times the amount of copper to equate to the same silver. So size and storage could definitely become a problem. In fact it's the very reason alot of people switch from silver to gold at a certain point, size weight (and value difference). The only difference here is ots 100 times worse.

I agree storage is an issue when stacking copper and that’s why my allocation to copper is already met at just 360oz!

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1 minute ago, Mothballjim said:

I’d love to see a photo of this! What a cool idea!

I did ask him after mentioning last time. He said "may be when is done"  I think he's a bit shy about his creation. Other than his family I think there's only a handful of others he's shown.

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24 minutes ago, Anteater said:

He paid £150 for it, so it's mostly premium rather than metal. While that does increase the value density, excepting an highly unrealistic rise in copper prices, it's not really a metals investment so much as a collectibles investment. (And if that unrealistic rise does happen I'm sure there are more efficient ways of obtaining exposure to it.) So far as a collectible goes there is only one recent UK sale of a similar bar (Geiger 5kg copper) on eBay, at a price slightly higher than he paid (£155 plus post vs £150 inc post). (It's important to look at sold items, not just asking prices.) So he might be able to flip it for a small profit but it's such a small market that reliably estimating value on it is hard.

Impressive research and I agree it definitely seems that it’s more the collectable side of it that will cause the upward movement in price. Be interesting to check back in say a years time and see how much they are selling for. 

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I bought one of those bars also, I'd been watching it for long enough and watched the price fluctuate from £140 to £180 and back down again in a matter of weeks as the supply chain and other issues hit so there is the distinct possibility that it will be resellable in the future for more than you paid for it.  Yes copper is a base metal not a precious metal and yes copper is cheap in if you weigh in scrap and that bar is mostly premium but nowadays an ounce of silver is mostly premium as well and that's something every silver stacker expects to get back when they sell.

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4 minutes ago, Scuzzle said:

I bought one of those bars also, I'd been watching it for long enough and watched the price fluctuate from £140 to £180 and back down again in a matter of weeks as the supply chain and other issues hit so there is the distinct possibility that it will be resellable in the future for more than you paid for it.  Yes copper is a base metal not a precious metal and yes copper is cheap in if you weigh in scrap and that bar is mostly premium but nowadays an ounce of silver is mostly premium as well and that's something every silver stacker expects to get back when they sell.

Very valid point about the premiums on silver!

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I think another big problem here is exit options.

With gold or silver you can take your metal to bullion dealer, a coin shop, a pawn shop etc as well as selling directly to a private buyer.

Some of these options you might take a loss on but any loss is going to likely be due to premium paid on the item when purchased.

With copper what you've paid for that is pretty much entirely premium so the only exit option to realistically not lose pretty much all your money on it is to find a private buyer.

There are clearly people out there who buy the stuff and pay 12x or more on spot price for it otherwise people wouldn't be making copper rounds but with the limited options of selling it and the low cost of the metal I don't think it's worth bothering with.

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5 minutes ago, WizardOfSov said:

I think another big problem here is exit options.

With gold or silver you can take your metal to bullion dealer, a coin shop, a pawn shop etc as well as selling directly to a private buyer.

Some of these options you might take a loss on but any loss is going to likely be due to premium paid on the item when purchased.

With copper what you've paid for that is pretty much entirely premium so the only exit option to realistically not lose pretty much all your money on it is to find a private buyer.

There are clearly people out there who buy the stuff and pay 12x or more on spot price for it otherwise people wouldn't be making copper rounds but with the limited options of selling it and the low cost of the metal I don't think it's worth bothering with.

Interesting points raised there. My exit plan would be eBay but to be honest it’s more of an experiment and I don’t plan to sell for minimum 5 years if at all. 

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Just now, WizardOfSov said:

I think another big problem here is exit options.

With gold or silver you can take your metal to bullion dealer, a coin shop, a pawn shop etc as well as selling directly to a private buyer.

Some of these options you might take a loss on but any loss is going to likely be due to premium paid on the item when purchased.

With copper what you've paid for that is pretty much entirely premium so the only exit option to realistically not lose pretty much all your money on it is to find a private buyer.

There are clearly people out there who buy the stuff and pay 12x or more on spot price for it otherwise people wouldn't be making copper rounds but with the limited options of selling it and the low cost of the metal I don't think it's worth bothering with.

Again look at silver and what a bullion dealer charges compared to what they pay to buy back.  Take Atkinsons for example, looking at their "sell to us" page they currently pay £21.59 for a 1oz silver Britannia that they are happy to sell to you for £32.48 new or £31.62 for a pre owned VAT free coin.  I would suggest that the current high premiums on silver make it no different than if you were trying to offload copper.  If you need a quick sale and are happy to take the hit to facilitate this then fine but if you don't want to be out of pocket you would be as well selling your silver privately or on Ebay than selling it back to a dealer.

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1 minute ago, Scuzzle said:

Again look at silver and what a bullion dealer charges compared to what they pay to buy back.  Take Atkinsons for example, looking at their "sell to us" page they currently pay £21.59 for a 1oz silver Britannia that they are happy to sell to you for £32.48 new or £31.62 for a pre owned VAT free coin.  I would suggest that the current high premiums on silver make it no different than if you were trying to offload copper.  If you need a quick sale and are happy to take the hit to facilitate this then fine but if you don't want to be out of pocket you would be as well selling your silver privately or on Ebay than selling it back to a dealer.

Valid point 

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16 minutes ago, Scuzzle said:

Again look at silver and what a bullion dealer charges compared to what they pay to buy back.  Take Atkinsons for example, looking at their "sell to us" page they currently pay £21.59 for a 1oz silver Britannia that they are happy to sell to you for £32.48 new or £31.62 for a pre owned VAT free coin.  I would suggest that the current high premiums on silver make it no different than if you were trying to offload copper.  If you need a quick sale and are happy to take the hit to facilitate this then fine but if you don't want to be out of pocket you would be as well selling your silver privately or on Ebay than selling it back to a dealer.

Yes i did mention in my post that some of the options for selling you could take a loss on due to premium.

A 50% or so premium on an ounce of silver isn't even in the same ball park as copper though.

European Mint for example sell 1oz copper rounds for £3.48 the spot value of the metal is 28p.

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55 minutes ago, Scuzzle said:

but nowadays an ounce of silver is mostly premium

It generally isn't, though. Even if we assume you're buying new at £32/ozt that's 62% premium, which is a lot but well under 100%. Copper at £150/5kg is a 333% premium (using @ShineyMagpie's copper spot value above), a factor of ~5.4x compared to the premium on silver. So while silver premium is high it's not even close to that premium on copper (and that with a higher min spend as presumably premium on small copper rounds/bars would be higher).

If we build 20% VAT on spot value into the comparison (which you might want to do if you're assuming that any sale of PMs would be to people who want bullion and would have to pay VAT on new bullion) then it's 34% on silver vs 261% on copper, a factor of ~7.7x.

(Now I'll wait for someone to point out all the silly errors in my numbers given how late in the evening it is...)

Edited by Anteater
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Like previously mentioned, copper is only an investment if you find it free. Next time your kettle or any other house appliance breaks down, cut the cord, take out the motor and you would have as much copper as probably ten of those rounds. If you want to pay for  copper, go to your local plumbers merchant

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5 hours ago, Mothballjim said:

Hello all,

What are your thoughts on copper bullion as an investment?

I’ve got a total of 360oz of copper bullion now & when I uploaded the below video today talking about this topic it got mixed reactions. 

Do you think copper bullion has a place in the portfolio or is it a waste of money?

 

quick quote....... rubbish, you'd be better off buying scap copper cut offs from a heating engineer

It does not matter how slowly you go so long as you do not stop.

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