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Copper Isn’t Done Yet

Thursday, 11 Nov 2010 | 7:45 PM ET

“Not everything that goes up is in a bubble,” Cramer said.

Example: Copper .

Look, with 34 cities home to more than 6 million people, China needs copper for infrastructure. They need it for electric lines and any kind of building. Hence the reason the Middle Kingdom now accounts for 30 percent of copper demand compared with 10 percent a decade ago.

Here in the States we’re building the same amount of homes as when the population was half as big as it is now. And household formation is falling by 50 percent, Cramer said, as a result of young adults just not leaving their parents homes. Neither of these trends is sustainable, though, so again, any kind of building would most likely further spike copper prices.

On a more personal level, Cramer also recounted the story of two of his friends who work in demolition. They’re seeing huge demand for any and all sources of the red metal, though it’s fetching prices usually reserved for the purest stuff, called “clean” copper. International buyers are a big presence now at copper trading centers, too. One of the friends said he recently sold a big load of the stuff to Turkish agents who lack the smelting facilities necessary back home to produce their own. Scrap copper, too, is in demand. The same scrap that used to be tossed out is now being snatched up at its earliest availability.

“The rally in copper’s real,” Cramer said. “Stop doubting it.”

To play it, he recommended the iPath Dow Jones-UBS Copper Subindex Total Return exchange-traded note.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

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