MetalMiner’s monthly copper price index dropped 1.1 percent for March, while we’re seeing an opposite trend in other commodities markets.
The LME 3-month price went down 0.5 percent, from $7,061 to $7,026 per metric ton. Copper seems not capable to reach levels above $7,500 per metric ton as it remains under an overall downtrend.
Copper is an economically sensitive commodity and it serves as a benchmark for the industrial metal sector, which still looks pessimistic. What is especially interesting is that the rest of the commodity groups are finally showing strength since the beginning of the year.
The chart shows how copper and the CRB index (representing the performance of a basket of commodities) are decoupling. These two have maintained a close relationship over the past few decades and it would be very rare to see them trending in different directions through the rest of the year.
What This Means For Metal Buyers
Copper, like any other industrial metal, is still struggling to go higher. Taking long-term positions may not be the best route – until we see real price strength. We will keep an eye on commodities baskets since they might be the next asset class to turn up, as they seem to be doing.
If commodities keep strengthening, money will likely flow into copper and the rest of industrial metals, pushing prices up.
Key Price Drivers of Copper Index
The price of Chinese copper wire closed the month after dropping 5.0 percent. Following a 4.4 percent decline, the Chinese copper cash price also finished lower.
The Japanese copper cash price decreased by 2.2 percent this month. At $7,026 per metric ton, the copper 3-month price was down 0.5 percent on the LME.
The price of US copper producer grade 110 rose 0.3 percent. The price of US copper producer grade 102 increased 0.2 percent.
Last month was consistent for the primary copper cash price on the LME, which did not move from $7,097 per metric ton. Korean copper strip held pat last month. Last month was consistent for Chinese bright copper scrap as well.
The Copper MMI® collects and weights 12 global copper metal price points to provide a unique view into copper price trends over a 30-day period. For more information on the Copper MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.